All's fair in love and war, as the saying goes. Accordingly, there was a great sense of relief when Commerzbank CEO Bettina Orlopp quickly made it clear that she would not respond to Unicredit’s advances with a poison pill. The former McKinsey partner is strategic enough to know how harmful it would be to make acquisitions just to deter a potential buyer. And she is ambitious enough to want to defend Commerzbank’s independence on her own terms.

Anyone who attended Commerzbank’s Capital Markets Day in mid-February expecting a strategic vision to be set out was left disappointed. Orlopp’s team filled more than 70 slides to make it unmistakably clear that everything remains the same. Business areas with stable revenues will be cautiously expanded, and existing customer relationships will be leveraged more effectively. Instead of new strategies, Commerzbank is focusing on cost-cutting to achieve profitability more quickly.

However, the announced job cuts will be expensive. Given the current situation, Orlopp cannot afford to enter into tough negotiations with employee representatives. And the layoffs are risky. The new Verdi representative on the supervisory board is already celebrating the fact that no one will have to leave Commerzbank against their will. But the flip side of this is that the bank will likely lose some top performers it would have preferred to keep. The HR departments of competitors in Frankfurt, and the newly established Anti-Money Laundering Authority (AMLA) will certainly take note.

All in all, it’s a rather unimaginative move. To achieve the hoped-for stock price boost, Commerzbank is instead intensifying its investor relations efforts. Orlopp promised investors a payout ratio of 100% in the coming years – after deducting restructuring costs and coupon payments for regulatory subordinated bonds. But the capital return plan introduced three years ago has yet to prove its resilience through an economic cycle.

And Commerzbank is not alone. In Spain, Banco Sabadell, under pressure from domestic competitor BBVA, is playing the same game. After already playing the national card by relocating its headquarters back to Catalonia, Sabadell CEO César González Bueno is now appealing to investors with financial incentives, in his fight for economic independence.

Earlier this year, González Bueno announced that Sabadell would distribute all capital remaining after maintaining a core equity ratio of 13%. „Our dividend-paying capacity is now greater than BBVA’s“, said the CEO during the bank’s annual earnings presentation. „Our shareholders must now decide whether they want to share that with BBVA or keep it to themselves.“

Investors will happily take the money. But they should carefully consider whether they want to commit to companies that rely on short-term financial incentives rather than a sustainable growth strategy. This same mindset – albeit in a different context – cost many banks their existence and wiped out shareholder investments during the 2008 financial crisis. And regulators, too, will need to carefully assess how long they will allow this tactic to be used as a defensive measure. Europe needs strong banks to hold their ground in the emerging new world order that has been taking shape since the change of government in the US. Given the external shocks looming in the coming years, the bill for the payout party could ultimately end up with the taxpayer once again.