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Commerzbank slashes 900 jobs

Commerzbank, Germany's second biggest lender, has told employees that it is to cull 900 jobs over the next two years.

The merging of the bank's processing and administrative aspects of its business operations is responsible for the cuts, necessitating 450 job losses in its retail banking division and 450 in its IT division, equating to 2.5 per cent of the bank's workforce.

The cost-cutting shake up comes after Commerzbank's recent $5.9 billion acquisition of mortgage lender Eurohypo AG, which it took over in a bit to stabilize and boost profits.

In a memo, board member Achim Kassow said: "We have rivals with lower costs and stronger growth rates than ours.

"We want to shape our own future, and if we're to be a big German bank that remains independent long term, then what we've accomplished so far isn't enough.''

Commerzbank shares went up by 30 cents to €29.17 in Frankfurt after the announcement, it was reported.

The bank is also seeking to cut its technology costs by a fifth by 2008 by reducing the headcount and relocating employees to its headquarters in Prague and Singapore.