Commerzbank CEO Manfred Knof has given the shareholders of the 7 billion euro bank much-needed hope. On Thursday, the former Deutsche Bank executive announced by surprise plans to cut 10,000 jobs and reduce the group’s branch network from 790 to 450. All to achieve a target return on tangible capital of 6.5% at 7% by 2024.

The plan, while encouraging compared to the previous profitability target of just 4%, still paints a bleak outlook in absolute terms. The cost of capital for most banks is typically around 10%, which means that Commerz will continue to hurt shareholders in 2024, even if it hits Knof’s 7% target. Revisiting the idea of ​​a merger with Deutsche Bank to save costs may be the only way to increase that number over time. Knof doesn’t need to wait until 2024 to try.