Germany’s largest money house wants to relieve its employees in the face of high inflation rates.
(Photo: dpa)
Frankfurt Deutsche Bank wants to pay numerous employees a tax-free bonus in view of the rise in energy and food prices. According to the current status of negotiations, wage employees in Germany should receive 1,500 euros, according to financial circles. However, a final decision has not yet been made.
A spokesman for the Frankfurt bank did not want to comment on the amount of the inflation compensation premium, but emphasized: “Deutsche Bank is examining the possibilities of the federal government’s third relief package.”
The relief package provides that companies can transfer their employees a tax-free bonus of up to 3,000 euros because of the high inflation rates. Several banks such as ING Germany, DKB, Targobank and Commerzbank have already announced corresponding payments. At other institutes, negotiations between management and employee representatives are still ongoing.
At Commerzbank, employees receive a bonus of between 500 and 2,000 euros in December. The board has also signaled its willingness to talk to employees about a possible increase in payments in the coming year.
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“Of course, we will have to keep an eye on the bank’s earnings situation,” said Sabine Schmittroth, Head of Human Resources at Commerzbank, in a post on the institute’s intranet on Friday. With the premiums in December, Commerzbank used the available budget in such a way that lower wage groups were relieved more.
Employees of the non-tariff service companies ComTS, the call center CDS and the conference hotel Collegium Glashütten should receive 2000 euros. Young professionals and employees of Commerzbank AG in Germany who are paid according to collective bargaining agreements receive EUR 1,000. 500 euros are paid to non-tariff employees in Germany and to employees abroad. Managers of the first and second management level get nothing.
Turnaround in interest rates drives banks’ profits
Many German financial institutions can currently easily afford to pay a premium, after all, things have been going well in their operative business recently – partly because of the interest rate increases by the European Central Bank. Deutsche Bank more than quintupled its profit in the third quarter to 1.1 billion euros.
In its quarterly report, however, the institute adopted a more cautious tone when looking to the future. Due to the “continued good business development”, the bank sees the possibility of “exceeding its earnings forecast for the full year 2022”.
On the other hand, the institute only said about the central goal of a return on tangible equity of eight percent: “In the last quarter of 2022, the group will continue to work towards achieving its financial goals”. However, this seems to be becoming increasingly difficult: the current environment is “increasingly characterized by challenges, and cost pressure has increased,” the institute warned.
The financial regulator has called on all banks to be careful with loan defaults in view of the looming recession and to maintain high capital and liquidity buffers.
More: Commerzbank employees receive an inflation bonus of up to 2,000 euros.