Commerzbank tower in Frankfurt, Germany. (Credit: Commerzbank AG.)

German lender Commerzbank is planning to make around 10,000 lay-offs and shutter 340 branches by 2024, as part of its cost reduction and digitisation strategy.

The retrenchment exercise could affect one in three jobs in the country. At September-end, the bank had a workforce of 39,600.

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Under the downsizing plan, Commerzbank plans to bring down the number of branches from the present 790 to 450. This is part of its wide-ranging digitalisation plan and aims to expand its digital offerings to customers.

The job cut and branch closure plan has been submitted by the bank’s board of managing directors to a supervisory board. The supervisory board will decide on the plan early next month.

The bank is focusing on significantly reducing costs in all areas and to increase its profitability by 2024. It now aims to put profitability before growth, mainly in the efficient use of capital or adequate product and services pricing, the bank added.

The restructure is expected to bring in €1.4bn or around 20% reduction in costs by 2024. The revenues are expected to remain largely flat, Commerzbank said.

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The restructuring expenses could total up to €1.8bn and they will be funded from the bank’s existing funds. It had also set aside a provision of €800m in the financial year 2020 to cover for a substantial portion of the restructuring expenses that it would incur.

Last month, the bank decided to allocate €610m to cover for 2,300 planned job cuts that are expected to take place between this year and 2024.

In the third quarter of last year, Commerzbank posted a loss of €69m and during that period, it closed 200 branches.