German bank merger 'will lead to job losses'

2 September 2008

Around 9,000 employees at Dresdner Kleinwort and Dresdner Bank will lose their jobs, due to the firms' merger deal with Commerzbank.

The cost-cutting plan, released today, comes after the loss-making London-based investment bank - and its parent company Dresdner Bank - was sold off by previous owners Allianz.

Commerzbank paid $14.5 billion to buy Dresdner over two steps, with a 60 per cent stake in the bank to be taken immediately and the rest next year.

This values the bank at far less than Allianz paid for it when it made its original acquisition in 2001.

Included in the job losses amount are around half of Dresdner's 2,500 London HQ staff, with traders, IT specialists and M&A bankers all facing redundancy.

The remainder of the cuts are expected to mainly be found in Germany, due to branch mergers and services duplications.

"It is good for Allianz. In the seven years they have owned Dresdner they have learned that they don't have a clue about running a bank," Dirk Becker, an analyst with Landsbanki Kepler, told Reuters.

"But it is a huge integration. We will see in half a year that something will go wrong."

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