Bold actions from the new management team Commerzbank''s new executives are taking big steps to reshape the bank for the future, reducing total staff numbers by 20%, and domestic branches by 55%, together with a range of technology investments, efficiency improvements and growth investments in selected areas. Near-term headwinds create uncertainty for the year ahead The bank is facing some adverse impacts in the coming quarters, from further margin pressure, RWA inflation, and the burden of additional restructuring costs. These are expected to cause another year of losses, and a drawdown of the capital ratio. Medium-term potential is very positive, if it works If the new restructuring plan works, it has potential to transform the bank''s outlook and valuation, with much better profitability (7-8% RoTE) and capital (14-15% CET1) as well as a much more modern and competitive operating model. We reduce 2021-22 estimates, but start to incorporate 2023-24 aspirations Updating our financial forecasts here reduces 2021-22 numbers, reflecting the near-term negatives. We start to model 2023-24 in the direction that the company is aiming for, but it will take some time for investors to see traction and gain confidence in that potential. We remain Neutral on the shares at this stage in the process The shares on 0.27x tangible book value are low relative to their range of the past few years (0.2-0.7x), and the potential implied by the RoTE target. However it will take time to work through the near-term challenges and assess future prospects. We remain Neutral here.