Commerzbank Names New CEO

March 6, 2016, 7:20 PM UTC
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Germany’s Commerzbank has named retail banking head Martin Zielke as its next chief executive officer from May 1, as the country’s second-biggest lender prepares to set medium-term targets.

Zielke, 53, will take over from current CEO Martin Blessing, who steered Commerzbank (CRZBY) through the turbulence that followed its takeover of Dresdner Bank in the midst of the financial crisis.

The German government had to bail out Commerzbank with more than 18 billion euros ($20 billion) in funds at the time and Berlin still holds a more than 15% stake in the lender.

Since then, the 52-year old Blessing has returned Commerzbank to profit and to paying a dividend, slashed risky assets and strengthened its capital base.

But Blessing, who announced in November he would step down this year, has refrained from giving the lender a fresh direction, preferring to leave that task to his successor.

Primed for the Top Job

Trained at larger rival Deutsche Bank (DB) before studying business administration at Goettingen University, Zielke has held positions in retail, corporate banking and finance at Commerzbank, including serving as chief financial officer of real estate unit Eurohypo.

He joined Commerzbank‘s management board in 2010 with responsibility for retail banking business, where he has sought to expand the division’s revenue and product offering through mobile, online and branch business while keeping costs stable in a highly competitive German market.

Zielke pared back hundreds of bank branches from a network that had expanded due to Commerzbank‘s takeover of peer Dresdner Bank in 2008, trimming his division’s ratio of costs to income to below 80% last year, from 85% a year earlier.

His quiet restructuring of his branch network stood in contrast to more radical revamps at other European lenders such as HVB but was in keeping with his style of avoiding the spotlight, said one long-time associate.

“His principle was always ‘fly under the radar’,” the person said.

While that style led many Commerzbank observers initially to give Zielke only an outside chance of winning the top job, his record at the retail bank is strong.

Zielke’s division has won more than 800,000 new customers over the last four years, helping to boost operating profit to more than 750 million euros last year, from around zero when he took over responsibility for retail.

The incoming CEO thus beat, a year early, his own target of earning more than 500 million euros in operating profit by 2016.