* CEO waives 700,000 euro bonus, says 2013 dividend unlikely
* Hopes to conclude talks on job cuts by summer
* Variable pay down 17.2 pct across the bank
* Shares up 2.9 percent
By Arno Schuetze and Edward Taylor
FRANKFURT, Feb 15 (Reuters) - Commerzbank's ChiefExecutive announced that he is to waive his 700,000 euro bonusfor 2012 and warned investors not to expect a dividend from whatwill be a difficult 2013.
Germany's second-biggest lender, which received an 18billion-euro government bailout at the height of the financialcrisis, said that this year's earnings will take a hit from aslowing economy and charges for cost cuts in its drive to makethe bank more resilient.
"The current year will not be an easy year," Chief ExecutiveMartin Blessing said on Friday, adding that a dividend paymentfor 2013 was unlikely. "Strengthening our capital will continueto be our priority."
Cut-throat competition and shrinking margins are forcinglenders across Europe to review their business. While Swiss peerUBS is firing 10,000 bankers, Barclays isaxing at least 3,700 jobs and German bellwether Deutsche Bank is cutting 2,000 positions.
Commerzbank has warned that more charges are to come. Itwill take a hit of about half a billion euros in the firstquarter of 2013 from a move to cut up to 6,000 jobs by 2016.
"2013 will be the year of change. And this change will costenergy, money and time," Blessing said, adding that he hopes toconclude negotiations with the works council on job cuts by thesummer break.
The bank this month posted a slump in 2012 net profit to 6million euros ($8 million) from 638 million a year earlier. Itsloan loss provisions rose to almost 1.7 billion euros from 1.4billion euros.
MARKET APPROVAL
Traders welcomed Commerzbank's pledge to continue toincrease its capital cushion to cover potential losses, whichhelped the shares to gain 2.9 percent by 1240 GMT, outperforminga 0.3 percent decline in the sector index.
The bank, whose core capital ratio stood at 7.6 percent atthe end of 2012, said it would take another two to three yearsto reach bank regulators' target of 9 percent by 2019.
In general, however, investor confidence in Commerzbankremains low. The bank's shares trade at 0.4 percent of itsexpected book value for the next 12 months, against an averageof 0.7 percent among its European peers.
Commerzbank, which specialises in lending to small andmedium-sized companies, the backbone of Germany's economy, saidthat it expects a revival of the German economy early this yearand a chance of strong growth in 2014.
Recent data showed that Germany's economy shrank in thefourth quarter more than at any time since the height of the2009 financial crisis and may have underperformed the wider eurozone for the first time since then.
Commerzbank did not provide a detailed outlook for its 2013earnings. In November it lowered its 2016 return on equity target to about 8 percent at group level, setting a goal belowthe industry's average cost of capital of 10-12 percent.
After announcing his own bonus sacrifice, CEO Blessing saidthat 2012 variable remuneration across the bank had shrunk 17percent, with investment bankers earning 20 percent less inbonuses.
The investment banking unit slid to a fourth-quarter pretaxloss of 69 million euros from a profit of 27 million a yearearlier.
By contrast, its Mittelstandsbank division, which financesmedium-sized German companies, posted a 30 percent rise year onyear with fourth-quarter pretax profit of 376 million euros.
Barclays (BARC)
