Commerzbank to name new boss

DRAWING ATTENTION: Directors say the bank wants to remain independent, but as its share price has fallen in the past months, it may be hard to keep suitors at bay


Mon, Nov 05, 2007 - Page 10

The second-biggest German bank, Commerzbank, is expected this week to name a new boss, Martin Blessing, to breathe new life into a group that has rebounded -- but which might soon have to fight off suitors.

The Frankfurt-based bank's supervisory council is to meet tomorrow and approve his nomination, a source close to the matter said on Friday.

The decision should not come as a surprise since Blessing has been mooted for many months as the natural successor to Klaus-Peter Mueller, the chairman.

Blessing, 44, is likely to head a younger management board that already includes financial director Eric Strutz and private banking head Achim Kassow, both of whom are also in their 40s.

In addition, the board is expected to see the arrival of Markus Beumer and Frank Annuscheit, who fall into the same age group as well.

Mueller's term does not end before 2010 but he has agreed to take on the post of supervisory board president, replacing Martin Kohlhaussen who celebrates his 72nd birthday this week.

Kohlhaussen was himself a former chairman.

According to the German daily Die Welt, Mueller's influence is likely to continue at Commerzbank.

However the newspaper suggested that Blessing's shoulders were perhaps not yet wide enough to assume the mantle from his mentor and run a bank that employs 36,000 people.

And Blessing, who would officially take over in May at a general assembly of bank shareholders, is a close aide to Mueller, who chose him in 2001 to join the board.

"A new wind and new concepts" were expected with Blessing's nomination, Mueller had said at the time.

The new board member was first assigned the task of turning around the loss-making Private Customers division before taking responsibility for Commerzbank's thriving strong small and medium-sized business unit.

Blessing was born into a family of bankers, his grandfather ran the German central bank in the 1960s and his father worked at what is now the biggest German bank, Deutsche Bank.

The younger Blessing cut his teeth working at Dresdner Bank after completing studies in in Frankfurt, St Gallen, Switzerland and Chicago.

He is to take over a Commerzbank that can now point to strong results even though it took a hit during the international banking crisis that followed the collapse of the US market for high-risk mortgages earlier this year.

Writedowns in connection with its credit commitments could be larger than expected when the bank releases third-quarter results expected tomorrow, analysts say, but earnings should increase nonetheless.

Commerzbank still anticipates a record full-year net profit.

Directors point to those results when they reiterate the bank's desire to remain an independent firm as takeover rumors swirl around it.

As a protective measure, Commerzbank swallowed the property banking group Eurohypo in 2005 to become the second-biggest private German bank.

But WestLB analyst Johannes Thormann said that might not be enough to keep all suitors at bay, especially since the bank's share price has fallen in the past months amid fears over the effects of the banking crisis.