Staff to feel crunch in huge merger

The aftermath of the 33 billion euro (HK$248.5 billion) merger between Deutsche Bank and Dresdner Bank is likely to be felt most keenly in London, the home of the investment banking divisions of both banks.

Banking analysts also suggested the Asia-Pacific operations of the German banks would be affected by the merger. Deutsche Bank employs 8,000 staff in its investment banking divisions alone, while Dresdner Kleinwort Benson (DKB), Dresdner's investment banking arm, employs 3,500 - many of whom represent an overlap with Deutsche Bank's own business.

Deutsche Bank has 16 regional offices in the Asia-Pacific region, including Hong Kong and Singapore, and employs 6,000 people, mostly in its investment banking division. Dresdner has a much smaller operation in the region.

Deutsche chief executive Rolf-Ernst Breuer may have referred to DKB as a 'jewel' last week, dismissing reports that Deutsche planned to sell it as 'pure nonsense'. But he also admitted that overlaps in all areas - apart from assets management - would have to be eliminated. This means at least 1,600 jobs will go from the group's global corporate and institution divisions, which includes investment banking.

It is a scenario that London bankers have seen several times. Deutsche Bank's investment banking group itself is an amalgamation of its own home-grown talent, the staff of BT Alex. Brown - the investment banking arm of Bankers Trust, which it bought in 1998 - and the equities division of the former NatWest Markets.

How Deutsche plans to integrate DKB will now be keenly watched, because who it chooses to keep and who it releases will be key to the direction it eventually takes.