FRANKFURT (Reuters) - Commerzbank (CBKG.DE) plans to cut or relocate around 440 London jobs in investment banking and back office technology to Frankfurt and other cities to reduce costs, according to a memo seen by Reuters.
Germany’s second-largest bank hopes to move around 80 front-office positions from its investment bank, including currency and bond traders, to its headquarters in Frankfurt.
Another 260 positions in information technology will be moved to Germany, Eastern Europe and Singapore. The majority of those positions are outside contractors.
In addition, about 100 positions would be cut from the London payroll, the memo said. The proposals are still subject to consultations with labour representatives, the memo said.
In October, Reuters reported Commerzbank was considering cutting back its fixed-income and currencies business in London as it adjusts to declining demand.
The investment bank saw operating profit fall by 8.5 percent in the first nine months of 2014, burdened mainly by weakness in the fixed-income and currencies unit.
London will remain a principle location for Commerzbank and no cuts in services or products will result from the restructuring, the memo said.
“We are just bundling certain capabilities ... but all products and services will be available in all locations as beforehand. Essentially this is a question of how we better and more efficiently deliver,” said Commerzbank’s investment banking head Michael Reuther in the memo.
Commerzbank and other European lenders are finding it increasingly difficult to reach targets laid out two or more years ago as the euro zone financial crisis drags on with lower economic growth and interest rates than expected.
Chief Executive Martin Blessing is half-way through a four-year, post-crisis recovery plan for Commerzbank, a household name that finances over a third of Germany’s exports and competes with Deutsche Bank (DBKGn.DE).
He has cut costs, reduced its balance sheet by about 40 billion euros and plans to lay off a total of 5,200 staff.
Reporting by Thomas Atkins; Editing by Arno Schuetze and Mark Potter