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EDITIONS
Tuesday, 12 November, 2002, 12:41 GMT
Battered banking giant slashes jobs
Commerzbank HQ in Frankfurt (centre)
Commerzbank's hopes of global domination have flopped
One-third of the investment bankers at Commerzbank face the sack, as the German banking giant slumps into the red.

Rumours of job cuts at Germany's third-largest bank have been rife ahead of its financial results for the three months to end-September.

Commerzbank posted a pre-tax loss of 133m euros ($134m; 84m) for the three months, battered by weak stock markets which have slashed the value of its global share holdings.

Jobs will go at its Commerzbank Securities investment banking operations, a sector in which it has invested lavishly in recent years.

Some 350 jobs will now go in London, New York, Tokyo, Singapore and Frankfurt.

Commerzbank Securities employs around 1,300 staff altogether.

And this may not be the last round of cuts, said bank spokesman Ulrich Ramm.

"We don't rule out that it could be several thousand additional jobs" that will be lost, he said. "The decision will come in early 2003."

Ambitions in tatters

Commerzbank now does not rule out making a loss for the whole of 2002.

Officially, it is making no prediction for the year, citing "volatile markets".

The news will again raise speculation that Commerzbank could be a takeover target, since it is seen as too small to compete with global market leaders such as Deutsche Bank and JP Morgan Chase.

Some analysts reckon it will have to work through its current financial problems before a suitor can be found, however.

During the 1990s, Commerzbank strove to break out of its modest size bracket, and ploughed money into investment banking and international operations.

General gloom

Commerzbank's travails come a time of general slump - or at best stagnation - for international investment banks.

A series of markets leaders, especially in the US, have unveiled weak profits, or even losses, and their credit ratings have in many cases been downgraded.

At the same time as Commerzbank was detailing its job cuts, Swiss giant UBS said its third-quarter profits were up just 4% year on year - a performance that represented a decline of almost one-third from the previous three-month period.

Like its rivals, UBS blamed the result on the weakness of international financial markets.

 WATCH/LISTEN
 ON THIS STORY
Commerzbank chairman Hans Peter Muller
"We're aiming to be a major european player"
Konrad Becker, Merck Finck in Munich
"We think at most German banks, except Deutsche Bank, there is a change in strategy"
See also:

08 Oct 02 | Business
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