Commerzbank, the second-biggest bank in Germany, has suspended its dividend and revealed more than 9,000 job losses as it tries to shore up its business in the face of ultra-low interest rates and sagging client activity.

The bank said its decision to cut almost one in five of its employees worldwide and merge two of its largest businesses will result in a €700m write-off and a loss for this quarter.

The bank’s Mittelstand division, seen as the engine room of Germany’s mid-sized corporate economy, will be combined with its corporate branch, while investment activity will be scaled back.

Commerzbank also warned that “ongoing weakness in the shipping markets” would push up its loan loss provisions in the coming months. The bank decided four years ago to exit the ship financing business but still has about €8bn on its books.

In total, 9,600 jobs are set to be cut while the bank hopes to hire 2,300 people in new areas to make its business more digital over the next four years. The wide-ranging restructuring will cost €1.1bn, the bank said, and will cut its cost base from €7.2bn a year to €6.5bn by 2020.

"We simply don't earn enough money to lead the bank sustainably and successfully into the future. And this situation will get worse if we don't do something about it," chief executive Martin Zielke said in a draft note to employees, according to Reuters.