Munich - Hard-hit by the global financial crisis, German
state-owned bank Bayerische Landesbank is planning to axe about every
fourth job as it launches a new restructuring drive, banking industry
sources told Deutsche Presse-Agentur dpa on Monday.
The 5,600 job cuts in its workforce of 19,000 are to fall both in
the Munich-based BayernLB's domestic and international operations.
The ailing bank said in October that was tapping the Federal
Government's special 500-billion-euro (645-billion-dollar) bank
rescue package to help it limp through the financial crisis.
The bank is half-owned by the Bavarian state government.
In future, Germany's second-biggest state-owned bank will wind
back its international operations to focus on small-to-medium-sized
German companies. As a result, the restructuring plan throws into
doubt the prospects for its investment banking business.
After being badly hit first by the fallout and corresponding big
writedowns from the US subprime mortgage market meltdown, BayernLB's
problems grew in the wake of losses caused by the shakeout in
Iceland's banking sector.
The BayernLB's announcement in October that it had run up bigger-
than-forecast losses was a factor in the resignation of Bavarian
Finance Minister Erwin Huber.
However, the sense of crisis at BayernLB appears to have continued
to deepen with the Bavarian state government saying on Friday it had
pieced together a new financial lifeline for the troubled bank
comprising cash injections and guarantees of more than 30 billion
euros.
BayernLB is expected to outline details of the restructuring at a
press conference set down for Monday.
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