July 6, 2020 / 11:54 AM / a month ago

Cerberus wants 'orderly process' to fill Commerzbank leadership void

FRANKFURT (Reuters) - Cerberus, a major shareholder in Commerzbank (CBKG.DE), said on Monday that the German bank must find a chairman before there is a formal search for a chief executive.

FILE PHOTO: A company logo is pictured at the headquarters of Germany's Commerzbank AG during the annual results news conference in Frankfurt, Germany, February 13, 2020. REUTERS/Ralph Orlowski/File Photo

Commerzbank’s chairman and chief executive stepped down unexpectedly on Friday, bowing to demands from Cerberus that the bank change its strategy to stop a downward spiral in its financial performance.

Commerzbank’s shares have fallen sharply since Cerberus bought a 5% stake in 2017, when it became the bank’s second-largest shareholder after the German government. Germany holds a stake after rescuing the bank following the 2008 financial crisis.

“The sudden departure of Commerzbank’s chairman and chief executive calls for an orderly process of filling the vacant positions,” a Cerberus representative said on Monday.

“First, a new chairman has to be found, followed by a formal process to find a successor for the CEO,” Cerberus said.

The bank’s management board met on Monday and the supervisory board will meet on Wednesday to discuss personnel issues, three people with knowledge of the matter said.

The bank’s shares, which sank to a record low in March, were up 7% in late afternoon trade in Frankfurt.

Analysts at CMC Markets wrote in a note to clients that the share price rise reflected “some confidence that any new CEO, whoever that maybe, won’t do a worse job than the previous one.”

Among possible internal contenders are Commerzbank management board members Roland Boekhout and Bettina Orlopp, people familiar with the matter said.

A Commerzbank spokeswoman declined to comment.

Stefan Wittmann, an official with the Verdi union who sits on Commerzbank’s supervisory board, said Orlopp was “clear-headed” in an interview with the publishing group RedaktionsNetzwerk Deutschland.

Credit rating agencies S&P and Moody’s on Monday said that the sudden resignations were “credit negative”, putting the German bank’s strategy at risk.

Moody’s said the management shake-up “raises questions about the bank’s strategic plan and increases uncertainties about the bank’s future financial profile”.

Reporting by Tom Sims and Hans Seidenstuecker; editing by Maria Sheahan/Jason Neely/Jane Merriman

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