German lender Commerzbank has announced plans to cut 3,900 jobs by 2028 and unveiled more ambitious financial targets as it seeks to fend off takeover advances from Italian bank UniCredit.

The job reductions, representing approximately 10 per cent of the workforce, will primarily affect support functions in Germany, with around 3,300 positions to be eliminated in the country. However, the bank's total workforce is expected to remain steady at 36,700 as it plans to increase hiring in overseas locations, particularly in Poland.

"We are accelerating our profitable growth and consistently driving forward our transformation," said chief executive officer Bettina Orlopp. "This makes Commerzbank stronger and better."

The restructuring will cost approximately 700 million euros in 2025, impacting the bank's projected profit for that year, which is expected to fall to 2.4 billion euros. Despite these costs, Commerzbank has raised its 2027 net profit target to 3.8 billion euros, up from a previous goal of 3.6 billion euros.

The strategic update comes as Commerzbank faces mounting pressure from UniCredit, which has accumulated a 28 per cent stake in the German lender. The battle has become a test case for Germany's ability to protect its financial centre from foreign takeovers.

German political resistance to the potential takeover remains strong. Boris Rhein, the premier of Commerzbank's home state of Hesse, recently addressed UniCredit at a gathering of Germany's financial elite, saying: "Nobody wants what you are doing. Withdraw!"

The bank's management team is working to convince investors that Commerzbank can thrive independently. "Commerzbank has what it takes to increase returns for shareholders in the years to come," said chief financial officer Carsten Schmitt. "Continually raising revenues, strict cost discipline, and a dynamic capital return provide the foundation for reliably increasing the bank's profitability."

The job cuts will be implemented through natural attrition and early retirement offers, while the bank simultaneously plans to strengthen its presence serving Germany's Mittelstand clients and grow its Polish subsidiary mBank.

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