The companies have not determined how the cuts will be broken down between the two centres but said they would be shared equally across most business areas including information technology, global markets and global equities.

The BBC's Peter Morgan: "London staff are in the front line for job cuts"

Analysts believe around 2,000 jobs are at risk in London alone but whatever the final number the deal will savage Deutsche Bank's London workforce of 3,000 and Bankers Trust's 2,400 in the City.

The news comes as the City of London faces a rash of job shedding in the wake of economic downturn and this year's financial crisis in emerging markets.

World's largest bank

Rodney Smith reports the deal is aimed at satisfying Deutsche's aspirations to be a global banking force

Germany's Deutsche Bank earlier announced it has come to terms with Bankers Trust for a $10.1bn takeover of the US investment bank, creating the world's largest bank.

A statement released by Deutsche says the supervisory boards of both banks approved a "definitive agreement" on Sunday which will see Deutsche acquire all Bankers Trust shares at $93 per share.

Deutsche said the tie-up would give it a "global platform for profitable growth."

The new entity will have more than $800bn in assets, overtaking the Union Bank of Switzerland, currently the world's number one.

However, the agreement is subject to the approval of shareholders of Bankers Trust and regulators in the United States, Europe and Germany.

All going well, the transaction is expected to be completed by May bringing savings of 1.7 marks ($1bn) under the combined operation.

Bankers Trust chairman Frank Neuman will join the Deutsche Bank board.

Trans-Atlantic strategy

Deutsche Bank chairman Rolf Breuer has previously said the German bank was looking for a trans-Atlantic partner to strengthen its position in investment banking.

Deutsche chief Rolf Breuer: 'globlal platform for growth'

The acquisition will help offset setbacks in Deutsche's investment banking business this year which culminated in the defection of its 100-strong California-based Technology Group to Credit Suisse in July.

For Bankers Trust, the deal will enable it to expand in Europe, where the financial sector will rival the US's when the single currency is launched in January.

"The main challenge for Deutsche will be managing risk because its earnings will become a lot more volatile," said Britta Graf, banking analyst at BNP in Frankfurt.

"It will also face a dilemma in integrating Bankers Trust: how to keep control of it while at the same time giving it a sufficiently long leash to prevent defections."

Higher price

The $10.1bn price tag is slightly above the $9.7bn offer floated last week.

Deutsche Bank said it planned to raise 4bn marks ($2.4bn) in fresh capital to finance the pruchase.

The rest of the funding would be financed by a range of financial instruments, such as bonds or convertible bonds, the bank said. Some of its cash and liquid assets would also be used.