"Many banks appear to be rethinking the size of their branch networks in light of digitalization and demographic changes," Dombret told Euro magazine in an interview released ahead of publication on Wednesday. "There must be no taboos," he added.

"We look bad in terms of profitability in an international comparison," Dombret said.

Profitability at German retail banks as measured by their pre-tax profit margin is the lowest in major European markets at 22 percent, according to a study by Citibank.

Germany's largest lender, Deutsche Bank (>> Deutsche Bank AG), is considering spinning off a chunk of its retail operations, particularly its Postbank (>> Deutsche Postbank AG) network, in a decision that expected in the coming days, sources familiar with Deutsche Bank's internal discussions told Reuters.

Other German banks are also looking at cost cuts to boost efficiency in their retail operations.

"Here, German banks could do more," Dombret said.

(Reporting by Jonathan Gould; editing by Thomas Atkins and Louise Heavens)

Stocks treated in this article : Deutsche Bank AG, Deutsche Postbank AG, Commerzbank AG