Commerzbank fine-tunes the strategic agenda for its international business
With a focus on German connectivity and selected lead sectors with significant future potential, Commerzbank fine-tunes the strategic agenda for its international business. Insights speaks to Michael Kotzbauer, the Board Member responsible for Corporate Clients, about his vision of the corporate segment upon the announcement of Commerzbank’s new strategy.
Appointed to Commerzbank’s Board of Directors on January 1st, Michael Kotzbauer has a profound knowledge of the needs and expectations of corporate clients. Kotzbauer looks back on many years of experience in the corporate segment holding several leadership positions at the Bank. Before his appointment as a Member of the Board, he was a Divisional Board Member in the Corporate Clients segment responsible for Mittelstandsbank in Central, Southern and Eastern Germany. From 2010 to 2013, he was Regional Board Member for the corporate clients’ business in Asia located in Shanghai.
In a nutshell, what are the key elements of your strategic agenda for the corporate segment?
Michael Kotzbauer: First and foremost, our client orientation: keeping our clients at the heart of all our activities. Next, excellence: if we are excellent in what we deliver to our clients, we will be rewarded for this. I strongly believe that excellence comes with a focused and committed approach. Which is why staying focused is another core element of our strategic agenda. We need to stay focused – we need to be clear about what is and what is not within our business scope.
This leads me to the next point: reducing complexity. We know that we need to become a more efficient organisation. This will involve myriad measures on many different levels. And here’s where we’ll have to take care of our international footprint: we need to optimise our international franchise.
In sum, our strategic agenda is definitely ambitious. Yet I am firmly convinced that all these elements are central not only to the future success of our institution but also to the excellence delivered to our clients.
How does the new strategic agenda impact your commitment to corporate clients?
MK: It is well known that accompanying corporates in their worldwide markets has been part of our DNA since Commerzbank was founded in 1870. While our strategic agenda certainly involves further fine-tuning of our international business, we can ensure that Commerzbank’s international network will remain an integral part of the Bank.
The scaling of our international presence is based on our continuous monitoring and optimisation of our business model, with a view to better serve our corporate clients’ needs. We will continue to be present in the major trade corridors for Germany and maintain branches, subsidiaries and representative offices as well as a broad network of correspondent banking relationships in countries relevant to our German corporate clients and their international business.
What are the key elements of your international agenda?
MK: As I said before, our clients are at the centre of all our activities. For us, striving for excellence in our business relations means that products, services and processes are designed from the client’s perspective.
That said, we continuously strive to optimise the solutions we offer. This is also reflected in our international corporate clients’ strategy. Basically, our agenda is based on four pillars, all of them underlining the focused approach outlined before:
- Focused client portfolio
- Focused bundling of sales expertise
- Focused regional hubs, and
- Focused nearshoring of support and administrative functions
German connectivity, the key word of our international strategy when it comes to our client portfolio, needs to be understood against the backdrop of our focus on being the best bank for our German corporates. With respect to our international clients, our focus will be on clients with a connectivity to Germany, that is, international clients which maintain subsidiaries or local entities in our home market Germany as well as in their respective country of origin. In addition, we will continue to be at the side of international clients in key sustainable industries.
Apart from a continuous monitoring of our client portfolio, we also need to keep an eye on our international setup. We will realign our international scope in accordance with our focus on the most important trade corridors that are relevant for our export-oriented economy and their global business. Furthermore, we will also streamline our global presence to reduce complexity and increase profitability.
Basically, we will strengthen our remaining regional hubs by consolidating our expertise and resources in our core markets. Also, the regional hub concept combined with the consolidation of our IT platforms as well as our focus on core clients’ requirements will enhance our efficiency and increase the profitability of the international network.
Will you continue to offer your sector expertise also to clients with no German connectivity?
MK: Beyond our country and product expertise, our international clients will continue to benefit from our sector expertise. Our focus here is on selected lead sectors with significant future potential.
These sectors represent key future-oriented business areas. What is more, our dedicated expertise in these areas allows us to offer excellent solutions to our clients and their specific needs.
Against the backdrop of the aforesaid, it becomes apparent as well that clients not falling into the scope outlined will not continue to benefit from our premium services.
What is your assessment of the scaling down of your global presence? Will it affect your position in the market as a leading commercial bank for corporates?
MK: Quite to the contrary. We are and will continue to be the undisputed number one in Germany’s corporate banking landscape. There is no way around Commerzbank for midsized or large German corporates. For international companies with German operations or business aspirations, we are the banking partner of choice – due to our leading position and in-depth knowledge of our home-market.
Through the optimisation of our international setup including our correspondence network, we aim at maintaining our leading position in financing the German foreign trade.
Latest press releases:
“Commerzbank announces cornerstones of its new strategy”, published on 03. February 2021.