If you want to upset someone at Deutsche Bank or Commerzbank in the coming months, say the word, "Dresdner." It is guaranteed to cause paroxysms of fear.
It's now 11 years since the merger between Commerzbank and Dresdner Bank. But memories of the resultant redundancies live on. There were around 9,000 job cuts, 70% of which were in the back office or in tech functions. 2,500 jobs went outside of Germany, with front office investment banking jobs axed with especial enthusiasm.
As the smaller partner, it was Dresdner that suffered the most: 1,200 sales, trading, research and M&A jobs swiftly disappeared from Dresdner Kleinwort Benson in London. There were complaints that bonuses had gone unpaid. Between 2009 and 2013, 80% of the Dresdner Kleinwort Benson London employees who were registered with the Financial Conduct Authority disappeared.
Commerzbank staff, in particular, are aware of this history. Although much has been written about the precarity of Deutsche's New York team, it's Commerzbank's salespeople, traders and investment bankers who have reason to fear a rerun of the past. In a merger with DB, it's they who look particularly exposed, particularly if they're working outside of Germany.
"People working in London, New York, or Asia for Commerzbank now should be very concerned," said one Commerzbank credit trader speaking off the record. "When Dresdner and Commerzbank merged, the German-based people in the investment bank didn't suffer too much, but outside Germany there were substantial cuts. It's clear that the same thing will happen again."
A New York-based Commerzbank trader said morale at the bank is very bad. "We've been told not to talk about it," he added.
While the merger is being pushed by senior executives, most rank and file bankers have their doubts as to its value. "It doesn't make sense and it will cost a huge amount of money to bring the two banks' systems together," said a senior salesman at Commerzbank in Frankfurt. He added that Commerzbank is already pushing digitisation and making 10,000 layoffs as part of a strategy unveiled in 2016. Inside Commerz, Deutsche Bank is seen as behind the curve.
While Commerzbank's salespeople and traders in London and New York are fearful, insiders suggest that cutting jobs in the U.K. and the U.S. won't achieve the desired effect anyway. "They will cut outside Germany because it's cheaper there and they will lose a lot of good people. But they will still have the fundamental issue of high costs in their home market. This is the real issue," says the Commerz credit trader.
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