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Dresdner faces job cuts despite profits

Allianz-owned Dresdner Bank's investment banking arm has announced second quarter revenues rise to around $2.5 billion, 20 per cent higher than anticipated by the German bank, making 80 per cent more than expected in foreign exchange deals alone.

However the rise will not be enough to prevent parent company Allianz, Europe's biggest insurer, carrying out large-scale jobs cuts in an effort to simplify management structures and cut operating costs.

The company said that around 2,500 jobs would be lost from Dresdner Bank, generating an estimated $755 million in savings over the next 12 to 18 months, in addition to further long-term savings.

The move comes just a year after Allianz sought to reduce the cost of running Dresdner by merging its investment banking and corporate banking divisions.

Once Germany's second largest bank, Dresdner has already seen some 17,000 jobs sacrificed since Allianz bought it for $29 billion in 2001, with many industry analysts viewing the Frankfurt-based operation as a drain on resources.

Job cuts are expected in both Germany and the UK.