Since the announcement of its new strategy at the Annual General Meeting in May 2000, Dresdner Bank has made significant progress in both programmes, most recently with the formation of Dresdner Kleinwort Wasserstein on the 4th of January of this year. In conjunction with the restructuring and cost savings programme, Dresdner Bank is implementing the following measures:
Outside of Europe Dresdner Bank will concentrate its balance sheet on the support of its investment banking clients. Therefore Dresdner Bank will exit the commercial lending business outside of Europe not tied to Investment Banking activities. This will affect mainly the regions of North America and Asia. Global staff will be reduced by approx. 600. Dresdner Bank Canada and Dresdner Bank branches in Thailand and India will be closed; business in China will be concentrated in Hongkong and Shanghai whilst Dresdner Bank branches in Shenzhen and Beijing will close. Operations in Australia will be considerably downsized and concentrated on distribution. The commercial lending portfolio will therefore be significantly reduced. The refocusing of the Bank's capital intensive business portfolio will have positive effects upon the Bank's Return on Equity.
At the Annual General Meeting in May 2000, Dresdner Bank indicated that an overall restructuring charge of approx. Euro 500 million would be required in relation to the costs of implementing the new strategy. Within this overall amount, a charge of Euro 330 million was subsequently announced as attributed to the reorganisation of the domestic branch network. A charge of Euro 200 million is now being announced in relation to the restructuring actions detailed today. Approximately 40% of this restructuring charge is due to the decommissioning of IT-systems, the writing-off of infrastructure related assets and the closure of offices.
Dresdner Bank anticipates generating significant cost savings from these measures. Cost savings are expected to be approx. Euro 80 - 100 million per year on an ongoing basis.
Commenting on today's announcement, Prof. Dr. Bernd Fahrholz, Chairman of the Board of Managing Directors of Dresdner Bank, said: "With the exit of non-core business outside of Europe, we are focusing further on our core global expertise as well as business areas with superior growth potential. I am convinced that the announced measures will enhance the profitability of the Dresdner Bank Group."
Leonhard Fischer, Member of the Board of Managing Directors of Dresdner Bank and Chief Executive Officer of Dresdner Kleinwort Wasserstein, said: "The exit of the commercial lending business outside of Europe not tied to Investment Banking activities enhances the global profile of Dresdner Kleinwort Wasserstein significantly. Following the recent completion of the merger with Wasserstein Perella we continue to reposition our investment bank with further investments in our franchise."