* Commerzbank to slash jobs, invest 1 bln in retail banking
* Commerzbank prepares for Nov 8 investor day
* German lender to outline strategy overhaul
* Union officials concerned about job-cutting plans
By Alexander Hübner and Arno Schuetze
FRANKFURT, Nov 7 (Reuters) - Commerzbank AG, is planning to cut jobs while investing 1 billion euros ($1.3 billion) in an overhaul of its retail business, two people close to the bank said on Wednesday.
Germany's second biggest bank has not yet decided how many jobs will go, the sources said, after German newspaper Die Zeit reported the group would cut up to 6,000 staff.
Commerzbank will join other big banks and companies across Europe in cutting jobs and costs because of the weak economy. Some of these include telecoms equipment group Ericsson , Dutch bank ING, wind turbine maker Vestas and steel group Kloeckner & Co.
Frankfurt-based Commerzbank confirmed the Reuters story late on Wednesday, saying it would spend more than 2 billion euros on its core business with about half of the investment earmarked for its retail business through to 2016. The bank's statement didn't include plans to cut jobs.
Commenting on its financial goals until 2016, Commerzbank said the core bank is targetting a return on equity after taxes (ROE) of more than 10 percent, while the cost-income ratio (CIR) is to be reduced to around 60 percent. Dividend payments for this year and next "are unlikely from the current stance," the bank said late Wednesday.
Commerzbank, which received an 18 billion euro bailout after the financial crisis, has since had to cope with Greek debt writedowns, the slowing euro zone economy and demands from regulators to increase capital reserves.
The bank, 25 percent state-owned, may announce more details of its latest strategy revamp at an investor event on Thursday.
Labour representatives expressed concern over the bank's reported job-cutting plans.
"We expect the employer to disclose any such plans and to create transparency, as this speculation causes considerable insecurity among our employees," Beate Mensch, a union official from the Ver.di trade union said in a statement on Wednesday.
Sources close to the bank said it aims to lower costs over the next four years to help reduce its cost-income-ratio to about 70 percent by 2016. This is still high compared with European peers. In 2011, Commerzbank posted a cost-income ratio of 80.8 percent on group level.
But a priority is to bolster the bank's capital position to meet new rules that require thicker cushions to absorb possible losses, the sources said.
Before working on other goals, the bank wants to ensure it achieves a core Tier 1 capital ratio of more than 9 percent under the new rules, known as Basel III, the sources said.
In August, the bank had said it expected to have a core Tier 1 ratio of 7.7 percent by January 2013. This ratio is used to measure a bank's financial strength.
The sources also said that a dividend payment was unlikely before the end of the four-year revamp period i n 2016.
In August, Commerzbank had warned of a worsening euro zone crisis and gave a grim profit outlook, saying it might not pay a dividend in 2013.
It had already been forced to drop its 2012 profit targets and limit new business to clients in Germany and Poland to meet new capital requirements.
After pulling back from shipping finance, commercial real estate and public sector lending, Commerzbank is to focus instead on an overhaul of its retail branch network.