Commerzbank’s new chief executive Manfred Knof is nobody’s idea of Mr Nice Guy, which probably explains his appointment.
A profile of Knof last year quoted a former colleague from insurer Allianz saying that Knof’s favourite tool when negotiating with unions was the crowbar.
This reputation as a human lever may have earned Knof his new position as chief executive of Commerz, after big shareholder Cerberus, the US private equity firm, helped to force out his predecessor Martin Zielke for cutting costs too slowly.
Knof certainly makes little effort to come over as warm and cuddly.
His opening statement in a press release announcing his appointment on Saturday was clinical, even for a German banker.
“I have a great deal of respect for this new assignment,” Knof said, in the tone of a man who has been reluctantly persuaded to accept an unpleasant task.
He acknowledged Commerz’s role in financing Germany’s mittelstand of small and medium-sized firms, before concluding: “And Commerzbank has a unique culture that I am very much looking forward to.”
That sentence looked ominously like it was missing a final word, such as “dismantling”.
Challenges
Knof will take over Commerz at the start of next year against a backdrop of unusually complex relations with key shareholders, as well as the fundamental challenges of negative interest rates and a domestic market that is overbanked.
When Zielke and Stefan Schmittmann resigned as chief executive and chairman of Commerz in July their departure was widely viewed as bowing to pressure from Cerberus. The US firm’s 2017 investment in both Commerz and Deutsche Bank is increasingly looking like a foolish bet, with its stakes in the firms now worth less than half their original purchase levels.
This is clearly not helping relations between German bank executives and their counterparts at Cerberus, including its abrasive president Matt Zames, a former JPMorgan banker.
Digitalization is becoming a commonly accepted euphemism for job cuts in both English and German
But Commerz’s most important single shareholder is the German state, which will face pressure from unions – and public opinion – to restrain Knof from an aggressive policy of job cuts during the Covid-related economic crisis.
Knof may be a Cerberus-approved appointment, but his new boss at Commerz – recently arrived chairman Hans-Jörg Vetter – was not what a US private equity investor would prescribe to revive a commercial bank, given his background as former head of state-owned Landesbank Baden-Würrtemberg.
Vetter adopted some commercial buzzwords in his announcement that Knof has been hired, perhaps to counter the impression that he is the wrong man for his own role.
Vetter said he was pleased to “win” Knof for the role of Commerz CEO, as though there had been a competition between struggling German banks for his services (which might well be the case, after reports that Knof was disappointed with the pace of change at his most recent employer, Deutsche).
Impact
After acknowledging that departing Commerz chief executive Zielke had “pushed ahead with the digitalization of the bank”, Vetter noted that Knof had “comprehensively digitalized the business of the insurer” while he was head of Allianz in Germany until 2017.
Translations are always fraught with potential misunderstanding. But it seems that digitalization is becoming a commonly accepted euphemism for job cuts in both English and German.
If Knof’s mandate is to “comprehensively” digitalize Commerzbank, rather than simply “pushing ahead” with digitalization, then Germany’s unions and politicians cannot claim that they have not been warned about the likely impact on jobs of his appointment.
And if it emerges that somewhere within Cerberus there is a document called ‘project crowbar’, designed to revive the firm’s bet on the struggling banks of Germany Inc by hiring a ruthless cost-cutter, then German perceptions of the motives of US investors will also have been confirmed.
