Commerzbank weighs cuts to London investment bank activities: sources
By Arno Schuetze
FRANKFURT (Reuters) - Germany's second-biggest lender Commerzbank AG (CBKG.DE: Quote) is considering cutting back its fixed income and currencies (FIC) business in London as it adjusts to declining demand, two sources familiar with the matter said.
The bank plans to shift around half of its roughly 250 FIC staff in London - who have already seen a headcount reduction of about 20 percent this year - to Frankfurt, said two sources who declined to be named because they are not authorized to speak to the media.
Like all investment banks, the bank is suffering from sluggish demand for products in areas such as interest rate hedging and forex hedging, as interest rates linger at historic lows and market volatility remains subdued.
"An exact number has not yet been decided," one of the sources said, adding that between 40 and 60 percent of London FIC staff may be affected. "Many London-based employees will not want to move to Frankfurt and (will) likely leave the company."
Commerzbank declined to comment on any possible job cuts but said no change in services for clients was under consideration.
"London remains key to Commerzbank’s international operations and the investment bank’s offering to clients remains unchanged across all asset classes," a spokeswoman said in a written statement.
After completing a takeover of rival Dresdner Bank in 2009, Commerzbank slashed investment banking staff and has seen its headcount in that area hover around 1,800 since.