Commerzbank: Steering Clear of Big Deals to Keep Orcel at Bay

Commerzbank AG, Germany's second-largest bank, has been making headlines recently, not for its mergers and acquisitions, but for its strategic decision to avoid large-scale deals. This approach, outlined in its "Strategy 2027" and "Moving Forward" plan, has been a key factor in keeping Tidjane Thiam, the former CEO of Credit Suisse, away from the bank's top job. Commerzbank's cautious stance on M&A has allowed it to focus on organic growth and digital transformation, setting it apart from its competitors in the banking sector.

Commerzbank's strategy is built on three pillars: growth, excellence, and responsibility. By avoiding big deals, the bank can maintain a strong capital base, which is crucial for its financial stability and regulatory compliance. This approach has enabled Commerzbank to improve its CET 1 ratio to 14.7% in 2023, comfortably above the regulatory minimum requirement (Commerzbank AG - Financial Statements and Management Report 2023).

Moreover, by focusing on organic growth, Commerzbank can concentrate on its core competencies and strengths, such as its strong position in the German Mittelstand and its expertise in corporate banking. This focus enables the bank to better serve its customers and maintain its competitive edge (Commerzbank Aktiengesellschaft / Key word(s): Strategic Company Decision).

Commerzbank's decision to spurn big deals also reduces integration risks, which can lead to unexpected costs and disruptions. By minimizing these risks, the bank can maintain a smoother operation and better serve its customers (Commerzbank Aktiengesellschaft / Key word(s): 9 Month figures/Capital Markets Day).

However, Commerzbank's cautious approach to M&A may impact its ability to attract and retain top talent like Tidjane Thiam. By not pursuing big deals, the bank may have fewer opportunities for rapid growth and expansion, which could be seen as less attractive to high-profile executives. Additionally, the lack of large-scale deals and the associated bonuses might make Commerzbank less appealing to executives who are used to earning significant bonuses from successful mergers and acquisitions.



Despite these potential drawbacks, Commerzbank's strategy offers unique advantages that could appeal to executives with a different mindset and priorities. By avoiding big deals, the bank can offer a more stable and secure working environment, which might be attractive to executives who value predictability and long-term career prospects. Furthermore, Commerzbank's commitment to sustainability and responsible banking could appeal to executives who want to work for a company that aligns with their personal values and has a positive impact on society.

In conclusion, Commerzbank's decision to spurn big deals has allowed the bank to focus on organic growth, digital transformation, and improving customer experience, setting it apart from its competitors in the banking sector. While this approach may impact the bank's ability to attract and retain top talent like Tidjane Thiam, it also offers unique advantages that could appeal to executives with a different mindset and priorities. As Commerzbank continues to execute its "Strategy 2027" and "Moving Forward" plan, it remains well-positioned to maintain its strong market position in the German banking sector.