Commerzbank names chairman candidate despite Cerberus doubts

Commerzbank names chairman candidate despite Cerberus doubts

Reuters  | Aug 03, 2020 17:11

Commerzbank names chairman candidate despite Cerberus doubts

By Tom Sims and Hans Seidenstuecker

FRANKFURT (Reuters) - Commerzbank (DE:CBKG) has confirmed Hans-Joerg Vetter, retired chief of a regional bank, is a candidate to become its chairman, rebuffing concerns about his qualifications voiced by top investor Cerberus.

The bank's board was convening on Monday afternoon to discuss the candidacy and an announcement is expected later in the day. The bank said the board had not yet made a decision to elect Vetter and gave no further detail.

The election of Vetter to the chair would help fill a leadership vacuum at Germany's No. 2 lender, but would risk further rankling Cerberus, the U.S. private equity firm that holds a 5% stake in the bank and has launched a campaign for change.

Commerzbank had not previously named any possible candidates but two sources familiar with the matter had last week told Reuters Vetter was being considered.

Cerberus, the second-largest investor in Commerzbank after the government, said in a letter to the bank's supervisory board dated Aug. 2 that it had grave concerns about Vetter and that it had its own names to pitch for the job.

In the letter, Cerberus said the new chair must help initiate and support a "necessary, far-reaching restructuring" at the bank.

"We have serious doubts that Hans-Joerg Vetter is the right person for this job or has the right experience for it," Cerberus said in the letter, a copy of which was seen by Reuters. A spokeswoman for Commerzbank declined to comment.

Commerzbank was thrust into turmoil last month when CEO Martin Zielke and supervisory board chairman Stefan Schmittmann said they would step down to give the bank a fresh start.

The resignations followed the public campaign for change by Cerberus, which has seen a slump of about 60% in the value of Commerzbank shares since buying its stake in 2017.

The 150-year-old lender has in recent months swung to a loss, halted its 2019 dividend plans, backtracked on the sale of its Polish lender mBank (WA:MBK) and suffered credit rating downgrades.

Vetter is a former chief executive of Landesbank Baden-Wuerttemberg. His supporters say he has restructuring and retail banking experience from his time at the Landesbank and previously when he was CEO of Bankgesellschaft Berlin.

"Cerberus has identified at least two candidates who have the required qualifications to fill the role of chairman and secure the confidence of all key stakeholders," Cerberus said, without naming them.

© Reuters. FILE PHOTO: People walk past a branch of Commerzbank in Berlin

The new chair is expected to lead the search for a new CEO.

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