Commerzbank AG is working with management consultancy firm Bain on updating its strategy as the German lender seeks to boost revenue while keeping costs in check.
(Bloomberg) — Commerzbank AG is working with management consultancy firm Bain on updating its strategy as the German lender seeks to boost revenue while keeping costs in check.
The bank has mandated Bain as part of efforts to adapt its existing strategy to a rapidly changing economic backdrop, people familiar with the matter said. Potential ideas include winning wealth management mandates from existing business clients, getting more companies to use digital services, and selling more products linked to sustainability considerations, the people said. All asked not to be identified discussing private deliberations.
Chief Executive Officer Manfred Knof is halfway through a four-year turnaround plan that’s seeking to boost profitability by curbing expenses and growing revenue. Yet rapid interest rate rises by the European Central Bank and consumer price inflation have rendered many of the assumptions underlying the strategy obsolete, creating the need for an updated plan, according to the people.
A spokeswoman for Commerzbank declined to comment. Representatives for Bain didn’t immediately respond to requests for comment.
As with other lenders, the rapid clip of rate hikes has been a big boost to Commerzbank, which earlier this month reported a surge in annual profit. Rising rates generally mean that banks charge more money on loans, while also earning a return on client deposits.
At the same time, the lender reported lower income from fees and commissions as a trading boom among retail clients that marked 2021 subsided. The lender also missed its cost target for the year.
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