The Supervisory Board Chairman Helmut Gottschalk (71), who has only been in office since April 2021, decided for reasons of age not to run again and, in coordination with the Federal Ministry of Finance, proposed Weidmann as his successor, the Frankfurt MDAX group surprisingly announced on Saturday evening.
Weidmann knows Commerzbank from difficult times: When the institute took over Dresdner Bank during the financial crisis of 2008/2009 and had to be saved from collapsing with billions in taxes, Weidmann was one of the leading advisors to the then Chancellor Angela Merkel (CDU) Head of the Department of Economic and Financial Policy in the Chancellery. Born in Solingen, he belonged to the group of top officials who put together rescue packages for struggling banks. Since the financial crisis, the federal government has been the largest single shareholder in Commerzbank with a current 15.6 percent stake.
In May 2011, at the age of 43, Weidmann took over the position at the central bank in Frankfurt from Axel Weber, who was the youngest Bundesbank president of all time. As a member of the Governing Council of the ECB, Weidmann also always warned that it would get out of hand monetary policy (“We shouldn’t underestimate the danger that central bank financing can be as addictive as a drug.”) and was critical of the ECB’s billion-dollar bond purchases. Many saw Weidmann as a lone voice.
Like Weber, Weidmann did not get a chance to fill the ECB chief post. And like Weber, who was drawn to the major Swiss bank UBS as Chairman of the Board of Directors (until the beginning of April 2022), Weidmann is now likely to be hired by a bank.
Weidmann, who has a doctorate in economics, set the course for a career change at the end of 2021: “I’ve come to the conclusion that more than 10 years is a good amount of time to start a new chapter – for the Bundesbank, but also for me personally,” left the then President of the Bundesbank and announced his resignation as of December 31, 2021.
Is Weidmann the right person to chair the supervisory board at Commerzbank? Volker Brühl, Managing Director of the Center for Financial Studies at Frankfurt’s Goethe University, is skeptical: “A former central banker does not necessarily have the profile of a supervisory board chairman at a major bank,” Brühl wrote on Twitter.
What speaks for Weidmann is that he is well connected both in Frankfurt and in political Berlin. And he could ensure more consistency at the top of the Commerzbank supervisory board: In the summer of 2020, the then chief controller Stefan Schmittmann gave up after clear criticism from the US financial investor Cerberus. The former Landesbanker Hans-Jörg Vetter followed, but for health reasons he had to resign in spring 2021. As a successor, Commerzbank surprisingly committed the cooperative banker Gottschalk.
The fact that Gottschalk’s relationship with Commerzbank CEO Manfred Knof is considered tense, according to media reports, because the chairman of the supervisory board interferes too much in day-to-day business could be another reason for the renewed change at the top of the supervisory board.
Knof, who started as a renovator at the beginning of 2021, has tightened the austerity course. Commerzbank has cut thousands of jobs and closed hundreds of branches. After losing billions in 2020, the institute is now back in the black. In the current year, the Executive Board is aiming for a profit of more than one billion euros, and shareholders are to receive a dividend for the 2022 financial year for the first time since 2018.
“Commerzbank has made great progress over the past year and a half with the realignment of the management team and the restoration of the profitability of the core business and is in robust shape again today,” said the outgoing chairman of the supervisory board, Gottschalk, in the statement on Saturday evening. “It therefore has good chances of shaping a sustainably successful future as an independent force in the German banking market.”
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