Big purge coming at Deutsche Bank?

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Forget Morgan Stanley (for a moment), is Deutsche going to be next in line for something unpleasant? Earlier this week, the German bank announced plans to expand its business and private clients division and to eliminate 1,100 jobs in the back office. But it has been silent over headcount in the corporate and investment bank.

This is strange given that Deutsche's corporate and investment bank is in a challenging place. According to analysis by Citigroup this week, Deutsche's investment banking unit is leveraged 69 times, far more than the likes of Morgan Stanley and Goldman, and more than UBS at 66 times and Credit Suisse at 62 times.

With Deutsche shares off nearly 60% this week, de-leveraging looks inevitable. In the process, Deutsche is likely to get rid of additional trading and trade support staff. So far, headcount cuts in the corporate and investment bank have been relatively minimal. Headcount peaked at 17,215 in 3Q07 and by 2Q08 it was down only 10%.

Back in April, chief financial officer Anthony Di Iorio said there were no plans for 'large scale redundancies'. That seems likely to change.