There was a time, and not long ago, when German banks were determined to make their mark on the global financial markets. Deutsche Bank acquired Morgan Grenfell and Bankers Trust and even started buying up others firms' staff. Dresdner acquired Kleinwort Benson. And WestLB and Commerzbank were hiring staff, especially in London, like it was going out of fashion.
Now Deutsche is just starting to restructure its wholesale banking operation, Dresdner is now owned by German insurer Allianz (and flirted with Commerzbank, Deutsche and Bruce Wasserstein along the way) and WestLB has sold businesses and appears to be circling the wagons around Germany. And then there is Commerzbank and its securities unit, which is not looking too hot.
Many of the unit's top executives have quit the business in recent weeks and Commerzbank has got in the consultants to sort out the mess. Reuters now quotes unnamed sources, reporting that the 'revamp of Commerzbank's investment banking arm is set to include hefty job cuts'. Another unnamed source is quoted, saying that 'it's important for Commerzbank that the job cuts are quite far-reaching and that the discussion about investment banking is then brought to an end. Plans for the business were too ambitious and it has never grown into them'.
A recent CSFB research report said that the job cuts could be 'drastic' and the Financial Times has now reported that the German bank it preparing to cut 25% of the 1,250 staff in its securities division, which is said to have had a cost/income ratio in the first half of this year of 86%.
Unfortunately, Commerzbank now looks like being just another German institution which has seen its global investment banking dreams fade and die away. In truth, only Deutsche remains now to carry the flag.