Slump in M&A prompts 250 City job losses at Dresdner

Dresdner Kleinwort Wasserstein yesterday completed a two-day cull of 250 staff from its UK office as part of a drive to cut 1,000 staff this week from the investment bank worldwide.

Dresdner said in August it would reduce its headcount by 3,000 by the end of this year. DrKW, which is the investment banking arm of Dresdner bank, is the first to loose employees in the latest job cuts by the German bank.

Among the biggest casualties were analysts at DrKW, which has already made 5,000 people redundant primarily from its research, corporate finance, mergers and acquisitions departments due to the global downturn in the stock markets.

The job losses are the latest in an estimated 60,000 jobs that have gone from the City in the last year to reflect the fact that mergers and acquisition work has practically dried up.

Dresdner, owned by German insurer Allianz, would not comment on the cuts, which have been going on in its London offices since Wednesday morning. It is expected to confirm them after a meeting of its supervisory board next Wednesday.

Dresdner's corporates and markets operation, which includes the bank's corporate clients business as well as Dresdner Kleinwort Wasserstein, employs 12,000 globally, making the ratio of losses one in 12 staff.

DrKW is thought to be planning to pull out of markets where it is not making money or in areas that it regards as non-core. These include some of its US businesses such as equities and debt and a high-yield debt division.

Dresdner, Germany's third-largest bank, lost €1.2bn (£780m) in the second quarter of this year, hit by the German economic slowdown and a surge in bad debt provisions from corporate failures.

Its investment banking business suffered from the slump in equities and mergers advisory business, posting a first-half pre-tax loss of 834m euros, compared with a profit of 571m euros a year ago.

There has been persistent speculation that Dresdner could try to sell Dresdner Kleinwort Wasserstein. Leonhard Fischer, DrKW's chief executive, has said this is not the bank's plan at the moment.