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Banking

Germany's Commerzbank to slash thousands of jobs worldwide

Germany's second biggest lender, Commerzbank, has struck a deal with the staff council about planned layoffs. The cuts are to lay the ground for a profitable retail banking business.

Germany's partly state-owned Commerzbank has reached a deal with its staff council to cut 5,000 jobs globally, the business newspaper "Handelsblatt" reported Tuesday. The lender warned in January that massive layoffs would be unavoidable in order for operations to be restructured.

The report said the breakthrough in negotiations had come after a week-long strategy meeting. "Talks have been successful," Commerzbank was quoted as saying, with a final vote on the result by the staff council expected on Wednesday.

Commerzbank targets thousands of job cuts

Commerzbank said the job cuts were necessary to reform the lender's ailing consumer business. Restructuring is to be carried out without further delay.

Reducing the debt load

The country's second largest bank got into huge trouble during the global financial crisis and had to be bailed out by the state. It received 16.4 billion euros ($21.9 billion) in loans from a state-run national rescue fund.

Commerzbank announced towards the end of May it had successfully raised another 2.5 billion euros from an issue of new shares which would be used to repay state bailouts.

The bank said that, as planned, the shareholding of the federal government had been reduced from 25 percent to about 17 percent. "We're in a position to redeem the silent participations of the state in full, and much earlier than planned," the lender said in a statement.

hg/jm (AFP, dpa)

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