Commerzbank's buyout of Dresdner to cost 9,000 jobs

LONDON: German lender Commerzbank's 9.8- billion-euro buyout of its rival Dresdner Bank AG will result in as much as 9,000 job cuts, with majority of them related to back office and investment banking.

Both Commerzbank and Dresdner Bank have a combined workforce of nearly 67,000 employees and out of the expected job cuts, about 2,500 would be outside Germany.

"As a result of the combination scheduled for the second half of 2009, some 9,000 full-time positions overall will become redundant, of whom 2,500 will be outside Germany.

"Around 70 per cent of these relate to back office, control and production units, as well as in investment banking. All measures available for a socially-responsible approach will be used," Commerzbank said in a statement.

Dresdner Bank AG is part of German insurance giant Allianz Group. The agreement to sell Dresdner Bank to Commerzbank was approved by the supervisory board of Allianz on August 31.



Commenting on the deal, Allianz CEO Michael Diekmann said, "with a stake of nearly 30 per cent, Allianz will be the largest shareholder of the new bank and will gain access to a powerful distribution network for its insurance products."

In April, Dresdner Bank had said it has received banking licence from India's central bank to open a branch in the country. The German lender would open its first branch in Mumbai in 2009.

"India is a booming market with an enormous customer potential. That's why it is essential for us to expand our presence in this region," Dresdner Bank's Board Chairman Herbert Walter had said.