FRANKFURT Commerzbank has picked former chief risk officer Stefan Schmittmann as its new chairman, as Germany's second-largest bank seeks to define a turnaround strategy.
Schmittmann is to succeed Klaus-Peter Mueller as supervisory board chairman in May 2018, when a two-year "cooling-off" period after stepping down as a Commerzbank executive ends, the bank said in a statement on Wednesday.
The new chairman, who will get an annual salary of 200,000 euros, was selected after a lengthy search process. He will be tasked with overseeing the implementation of a strategy that Chief Executive Martin Zielke, who took office in May, is set to formulate this autumn.
Like other banks, Commerzbank is suffering from businesses borrowing less, a drag on its revenue from negative interest rates and a rising regulatory burden. It warned in August that its earnings would fall this year.
Commerzbank is expected to cut up to 20 percent of jobs at its Mittelstandsbank business, which in the past provided steady earnings from lending to Germany's small and medium-sized business community but has been struggling due to weak loan demand.
Job cuts will, however, not only hit the Mittelstandsbank, but also other parts of Commerzbank such as its investment bank, sources have said.
Also on Schmittmann's agenda will be the options for bank consolidation in Germany.
Zielke last month met with his counterpart at Deutsche Bank to discuss a potential merger, but concluded that both needed to first complete their restructurings.
Commerzbank's outgoing chairman Mueller, 72, took office in 2008 and oversaw the integration of Dresdner Bank, which was acquired while he was chief executive. Dresdner's toxic assets required Commerzbank to take a 18 billion euro state bailout.
The German government remains Commerzbank's largest shareholder with a stake of 15 percent.
Banking supervisory sources said ahead of the decision it was important the new chairman could ask critical questions as Commerzbank rolls out its strategy for the coming years.
Schmittmann, who will be 60 in November, served on the Commerzbank executive board from 2008 to 2015, having joined from Unicredit-owned peer HVB, where he had started his career in banking. He is deputy chairman of Austrian "bad bank" Heta.
Separately, former Credit Suisse risk head, Tobias Guldimann, is being prepared to chair the bank's audit committee from 2018 and will be nominated to replace Deutsche Boerse's Roger Mueller on the supervisory board next year.
(Additional reporting by Jonathan Gould; Editing by Maria Sheahan and Alexander Smith)