(Bloomberg) -- Commerzbank AG Chief Executive Officer Manfred Knof won’t seek an extension to his contract, leaving the German lender searching for a replacement at the same time as the government begins to sell its stake.
Chief Financial Officer Bettina Orlopp is seen as a strong candidate to succeed Knof, although the bank will also vet other people for the role including external ones, people familiar with the matter said. A decision may come as early as this year, but could also slip into 2025, they said, asking not to be named discussing the private information.
Commerzbank said in a statement on Tuesday that it will commence an orderly search process for the successor to the role of the CEO immediately. A spokesman declined to comment on candidates.
Knof informed Jens Weidmann, who chairs the bank’s supervisory board, that he “won’t be at the disposal” of the firm beyond the end of next year, when his current contract runs out, Commerzbank said.
Separately, Germany’s finance agency, which manages the country’s stake of about 16.5%, said it will cut the holding to 12%. At the lower end of the price range set by the banks organizing the trade, the sale would raise €661 million ($729 million), according to calculations by Bloomberg.
The government’s decision to reduce its stake comes at a critical point for the German lender, which saw profit surge to a record last year. The stock has more than doubled under Knof, a former Deutsche Bank AG executive who has cut jobs, stepped up the bank’s digitalization and grown the business serving large companies.
Weidmann “has taken note of this with big regret,” Commerzbank said of Knof’s plan to leave. The board will start looking for a successor to the CEO immediately, according to the statement on Tuesday.
Berlin has long played a role in many of Commerzbank’s most important decisions, including the appointment of Weidmann. Its position as largest investor helped shore up confidence while Commerzbank was struggling with poor profitability, and it has been a bulwark for the firm when European rivals were mulling the possibility of a takeover in previous years.
Germany will now sell more than 53 million Commerzbank shares, according to the finance agency. The share placement is directed to institutional investors and the state will remain Commerzbank’s largest shareholder after the transaction, it said.
When Knof took over at the beginning of 2021, Commerzbank was in the throes of a deep crisis, saddled with a strategy widely seen as a failure that had prompted the sudden departures of the previous CEO and the chairman.
Knof ended Commerzbank’s fixation on brick-and-mortar retail branches and poured money into digital services instead. A strategy to pay out a rising share of Commerzbank’s profits indicates an effort to patch up relations with shareholders put off by a decade or so of falling shares and meager returns.
Commerzbank Supervisory Board member Stefan Wittmann said he too “regretted” Knof’s decision. “Under Knof, the bank ran smoothly for the first time,” the labor union representative said.
(Updates with estimated stake sale proceeds in fifth paragraph.)
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