July 8, 2020 / 8:25 AM / a month ago

Commerzbank board meets amid leadership void after top resignations

FRANKFURT (Reuters) - Commerzbank’s supervisory board formally accepted the resignation of its chief executive at a meeting on Wednesday amid a continuing leadership vacuum at the top of Germany’s No. 2 bank.

A Commerzbank logo is pictured before the bank's annual news conference in Frankfurt, Germany, February 9, 2017. REUTERS/Ralph Orlowski/Files

Management also presented strategic options to the board, which included 10,000 job cuts, 500 branch closures, and restructuring costs of 1.5 billion euros ($1.7 billion), two people with knowledge of the matter said.

The lender was thrust into turmoil on Friday when chief executive Martin Zielke and supervisory board chairman Stefan Schmittmann said they would step down to give the bank a fresh start.

That followed a public campaign for change by a top investor, the U.S. private equity firm Cerberus, which holds a 5% stake in the bank.

The board tasked a committee headed by Schmittmann to look for external candidates for both the CEO and supervisory board, the people said, adding that they are expected to vote on a new chairman at a meeting on Aug. 3.

As expected the board rubber-stamped a recommendation to accept Zielke’s resignation by year-end. “Zielke has declared his willingness to continue to perform his duties until a successor has been appointed,” Commerzbank said.

A priority for some top investors was to identify a new chair before moving forward with a CEO search and restructuring. However, some obvious candidates for the chair already on the board have signalled they do not want the job, sources said.

Employee representatives have been pushing back on plans to cut jobs. The cuts suggested on Wednesday represent roughly every fourth job and half of its branches.

Stefan Wittmann, a union representative who sits on Commerzbank’s supervisory board, told Deutschlandfunk radio on Wednesday that the bank cannot discuss strategy until the personnel questions are cleared up.

($1 = 0.8825 euros)

Reporting by Tom Sims and Hans Seidenstuecker; Editing by Michelle Martin and Jan Harvey

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