At UniCredit, Orcel inherited a bank already emerging from a five-year restructuring under Jean-Pierre Mustier that lowered annual operating costs to 52% of income, similar to Commerzbank's current 50%.
Orcel pushed the ratio down a further 18 percentage points, including by taking another €470 million off the annualised cost base, even as revenues soared.
He has merged units within UniCredit's organisational chart into bigger divisions, cutting overall staff numbers within divisions and the senior people overseeing their work, one current and one former employee told Reuters.
UniCredit said in July the number of organisational units had fallen to about 6,400 structures from around 11,500 at the end of 2020.
One mid-level executive described the cost discipline as so strict it seemed better suited to a bank in distress than one handing out record payouts to shareholders.
Dozens of long-serving senior executives have left, with a high level of turnover at the top.
UniCredit's 34% cost-to-income ratio places it alongside Italian rival Intesa Sanpaolo's ISP.MI 36% - both far below the 55% average for ECB-supervised banks.
But executives contrast the corporate culture and management style at UniCredit with Intesa.
The latter is known for giving staff job security while keeping a lid on pay. Orcel, instead, brought with him the mindset of large U.S. investment banks where top performers are richly rewarded and highly paid weaker performers are shown the door, one serving UniCredit executive said.
Orcel has pledged to lower Commerzbank's costs to 37% of income by 2030, targeting in particular central functions, non-core costs such as consulting and the bank's international network.
Chicago Booth's Huber said Commerzbank's business model, built around long-term client relationships, was more costly than UniCredit's, which has standardised its banking products to deliver them at scale.
"They must pay attention to that. That's a big challenge," he said.
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