Bund offloads a portion of its Commerzbank stake
Amidst the financial turmoil, the federal government injected funds into Commerzbank to keep it afloat. Fast forward, the bank has weathered the storm and is now sailing on calm waters. The government is now offloading parts of its investment in Commerzbank. In a swift move, roughly 53 million shares of the bank are being offloaded to institutional investors, as per the government's financial department's announcement. This move will decrease the government's ownership stake in Commerzbank from approximately 16.5% to 12.0%. Despite this sale, Germany will continue to be Commerzbank's largest shareholder. Valued at around 680 million euros, this transaction will go through at the current share price.
Last week, the financial department had hinted at gradually disentangling itself from Commerzbank. The bank received a total of 18.2 billion euros in financial aid from the government during the financial crisis in 2008 and 2009. As per the financial department's records, around 13.15 billion euros of this aid has been repaid thus far.
Meanwhile, Commerzbank is on the hunt for a new CEO. The current chairman of the board of management will be stepping down at the end of his tenure. Manfred Knof will serve until the end of December 2025, but he will not be available to Commerzbank beyond that, according to the bank's announcement. The chairman of the supervisory board, Jens Weidmann, expressed his regret at Knof's departure but also praised his significant contributions to the bank. The supervisory board is now in search of a suitable candidate to replace Knof.
Knof took charge of the bank in January 2021 and implemented a harsh austerity plan. As part of the restructuring process, the branch network was scaled down significantly, and thousands of jobs were lost. Due to the rising interest rates, the bank also reported record profits last year.
The sale of government-owned shares is being overseen by the Bank governor, ensuring a smooth transition to institutional investors. After Manfred Knof's tenure ends, the Bank governor will play a crucial role in selecting his successor as the new CEO of Commerzbank.
