By the end of 2020 Commerzbank (CRZBY) will have sustainably increased its profitability. As part of the "Commerzbank 4.0" strategy, it will concentrate on its core businesses and digitalise 80% of relevant processes, thereby achieving significant efficiency gains. Its business will be focused in two customer segments, "Private and Small Business Customers" and "Corporate Clients". The Mittelstandsbank and Corporates & Markets segments will be consolidated into a single unit and trading activities in investment banking scaled back.

The downsizing of the trading activities will reduce earnings volatility and regulatory risk, and will free up capital to be invested in the core businesses. Commerzbank is aiming for a net return on tangible equity of more than 6% by the end of 2020. This target is based on the expectation that the interest rate environment will remain challenging. Should interest rates improve, a net return on tangible equity of more than 8% will be achievable. Commerzbank is expecting revenues for 2020 to total between EURO$9.8 and 10.3 billion. The cost base is to be reduced to EURO$6.5 billion, taking the cost/income ratio to below 66%. In a normalised interest rate environment, revenues could rise to over EURO$11 billion and the cost/income ratio could fall to around 60%. The Common Equity Tier 1 ratio, after full application of Basel 3, is expected to stay at around 12% and will be above 12% in 2018 taking into account currently foreseeable regulatory developments. For 2020 the Bank is expecting a ratio of above 13%. To cover its restructuring costs of around EURO$1.1 billion, Commerzbank will cease dividend payments for the time being and will retain its full earnings.

The focus on the core business, with some business activities being discontinued, and the digitalisation and automation of workflows will lead to staff reductions amounting to around 9,600 full-time positions. The Bank will shortly begin preparatory discussions with the relevant employee representative committees. At the same time, around 2,300 new jobs will be created in areas of business growth. Hence the net number of jobs shed will amount to around 7,300 full-time positions.