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October 15, 2001

Commerzbank launches extensive restructuring and cost-cutting measures - Two new board members

In the months of July and August, Commerzbank registered a negative after-tax result of about EUR 120m overall, the bank's chairman, Klaus-Peter Müller, told its supervisory board on October 15. As the very difficult business environment also rules out a more optimistic forecast for September, the bank's board of managing directors assumes that the result was again negative. Not only was earnings performance weak, but also risk provisioning was stepped up. As things stand, however, the bank expects to achieve a net profit for the present year as a whole that will enable it to pay a dividend.

In order to secure a rapid improvement in earnings performance, the board of managing directors has presented an extensive restructuring and cost-cutting offensive for 2002, which is to be implemented immediately. Apart from substantial savings on non-personnel costs, it entails a reduction of roughly 3,400 in the bank's workforce by 2003. As far as possible, the downsizing will be realized in a socially acceptable manner, largely making use of normal staff turnover and flexible working-time models. The supervisory board was informed of all the planned measures, which in 2002 will bring operating expenses down to last year's level - i.e. around EUR 5.5bn.

The supervisory board also appointed two new members to the board of managing directors with effect from November 1: Martin Blessing (38), until August chairman of Advance Bank, and Mehmet Dalman (43), up to now head of Commerzbank's securities department. Dr. Heinz Hockmann (49) is leaving the bank's board of managing directors by mutual agreement and Dr. Norbert Käsbeck (59) is doing so for health reasons.