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Report: German regulator may fine Commerzbank up to €195M over late disclosure

The German financial supervisor Bafin is considering imposing a fine of up to €195 million on Commerzbank AG over suspected late disclosure of a strategy change in 2016, Handelsblatt reported May 30, citing insiders.

The regulator has reason to believe that Commerzbank might have needed to inform the markets about its latest strategic revamp earlier than it did, given that the internal planning process was fairly advanced by September 29, 2016, when the bank released its official announcement.

Furthermore, an internal memo was sent to staff September 28 in which CEO Martin Zielke outlined the key points of the new Commerzbank 4.0 strategy, according to Handelsblatt. The memo was removed from the bank's intranet system soon after its release, but it had already been picked up by a few media outlets. The following day, Commerzbank came out with an ad hoc statement about its 2020 strategic restructuring, which included a plan to reduce headcount by 9,600 and merge the group's investment banking and corporate client divisions.

The Bafin investigation is continuing and there is no deadline for a decision on the matter yet, Handelsblatt reported. Commerzbank declined to comment on the ongoing probe when approached by the newspaper.

Based on German disclosure rules, the size of a potential fine for late disclosure can be up to 2% of the bank's revenue in the year preceding the incident under review, according to Handelsblatt. Commerzbank made €9.76 billion in revenues in 2015, and therefore the highest fine that Bafin could impose would be €195 million, the newspaper estimated.