German lender Commerzbank said Thursday it plans to cut about 3,900 jobs, around 10 percent of its workforce, seeking to fight off pressure for a tie-up from Italian bank UniCredit.

The bank also hiked its financial targets, as executives aim to boost its attractiveness for shareholders and bolster defences against its Italian suitor amid speculation that a takeover bid is on the horizon.

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

The job cuts, to be implemented by 2028, come after Germany’s second-biggest bank booked a record profit in 2024.

But the bank said they could be justified due to “efficiency gains” from digitalisation and increased use of overseas sites, and they would be implemented through such steps as offering early retirement.

The cuts will mainly take place in Germany but, at the same time, more jobs will be added overseas in locations such as Poland, the bank said.

The planned restructuring will entail costs of around 700 million euros ($730 million) before taxes in 2025, the bank said.

Commerzbank had already embarked on a cost-cutting drive in recent years, reducing staff and closing branches, which had helped it to grow its profits.

– European banking battle –

The UniCredit-Commerzbank saga began in September when Italy’s second-biggest bank revealed it had built up a stake in its rival, triggering talk that CEO Andrea Orcel wanted to push for an ambitious pan-European banking merger.

It has since boosted its holding in the German bank to around 28 percent.

But Commerzbank has vowed to fight any takeover, and the approach has sparked anger in Germany, with politicians, led by Chancellor Olaf Scholz, opposed to it.

The German bank also unveiled a long-awaited strategy update Thursday, which involved boosting a range of financial targets.

It is aiming to grow profit to 4.2 billion euros by 2028, up from about 2.7 billion last year. It also said it expects net profit for 2027 to come in higher than it had originally forecast.

For this year, Commerzbank expects net profit to come in at 2.4 billion euros, once restructuring charges are taken into account.

Deutsche Bank said in a note that the new targets were “bullish” and went beyond analysts’ expectations.

It said it was “particularly encouraged by the positive 2025 guidance” and the restructuring programme.

Despite the resistance of the German establishment, some EU policymakers have backed the idea of a tie-up, saying it would create a heavyweight better able to compete internationally.

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