European banks cutting 20000 jobs as ING joins Commerzbank, ABN – The Sydney Morning Herald


European banks are preparing a fresh round of bloodletting – with some 20,000 jobs set to go – as tougher rules and negative interest rates weigh on profits.

ING Groep NV will shed 5800 positions over five years as it focuses on internet and mobile banking and automates systems, the Amsterdam-based lender said on Monday. Just last week, Germany’s Commerzbank AG disclosed plans to cut 9600 jobs, while Spain’s Banco Popular Espanol SA said it will eliminate as many as 3000 posts after tapping investors for funds.


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“Banks are facing high regulatory costs and competition on margins and pricing due to the low-rate environment,” said Karim Bertoni, a fund manager at Bellevue Asset Management in Switzerland, which has about 6.9 billion Swiss francs ($9.2 billion) under management. “They are trying to reduce costs and people is one of the biggest parts of that.”

The announcements herald the latest wave of job cuts at European banks, which have struggled to increase profitability since the global financial crisis and the region’s sovereign-debt debacle. Deutsche Bank AG, Germany’s largest bank, is poised to reach an agreement with labour representatives this week that will allow it to eliminate about 1000 jobs in its home market as part of cost cuts it announced last year, said people with knowledge of the matter.

Deutsche Bank chief executive John Cryan, 55, has sought to reassure investors that he can boost profitability as mounting legal costs prompted some clients to pull funds and investors to question the lender’s financial health. As part of his overhaul announced in October 2015, the CEO plans to eliminate 9000 jobs, or about 9 per cent of the global workforce, including 4000 positions in Germany.

ING expects to save about €900 million ($1.3 billion) a year through its job-cutting program, while investing about €800 million in digital technology. It’s biggest Dutch rival, ABN Amro Group NV, said last month that it would eliminate as many as 1375 jobs, or 6 per cent of the workforce, through 2020.

ING Groep NV will shed 5800 positions over five years as it focuses on internet and mobile banking and automates systems.
ING Groep NV will shed 5800 positions over five years as it focuses on internet and mobile banking and automates systems. Photo: AP

Commerzbank’s new CEO, Martin Zielke, plans to trim about one in five jobs, suspend dividends and shrink securities trading in the biggest overhaul since the lender’s bailout during the financial crisis.

“Many of these cuts are necessary because of the overly fragmented nature of euro-area banks,” Bloomberg Intelligence analysts Jonathan Tyce and Arjun Bowry said in a note Monday.

Bloomberg

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