Commerzbank plans to axe 3,900 mostly local jobs to help it deliver more ambitious profit targets as part of its strategy to fend off UniCredit's advances for a tie-up between the German and Italian lenders,

The lender plans to lay off around 9% of its workforce in a bid to boost returns and convince investors of its standalone prospects.

Commerzbank announced it will eliminate 3,900 full-time positions by 2028, largely in its native Germany, as it unveiled a spate of new strategic targets.

Commerzbank said on Thursday it would cut 3,900 jobs and unveiled more ambitious financial targets as part of a strategy revamp designed to head off UniCredit's advances for a tie-up between the German and Italian lenders.

The battle for Commerzbank, pitting one of Italy’s biggest banks against the German establishment, has become a test case of the country’s ability to fend off foreign suitors and prevent its financial centre from losing one of its few remaining big commercial banks.

The lender plans to execute the job reductions by primarily relying on demographic changes and natural workforce fluctuations.

Germany's Commerzbank is preparing staff cuts and revamped financial targets in its efforts to fend off tie-up advances by Italy's UniCredit , multiple people with direct knowledge of the plans told Reuters.