Munich - Hard-hit by the global financial crisis, German
state-owned bank Bayerische Landesbank said Monday it is planning to
axe about every fourth job as it launches a restructuring drive.
The 5,600 job cuts in its workforce of 19,000 are to fall both in
the bank's domestic and international operations and are to be
rolled out in the years to 2013, BayernLB chief Michael Kemmer said.
The Munich-based 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 Bavarian state government is BayernLB's principal owner.
'The BayernLB will be another bank after the restructuring,' said
Kemmer with the bank's total business to be slimmed down by about
one third.
As part of the changes, Germany's second-biggest state-owned bank
will focus on small-to-medium-sized German companies as well as
closer cooperation with the nation's regional savings banks.
After a long-running global expansion drive, BayernLB now plans
to wind back its international operations make a complete withdraw
from Asia, leading to the closure of its offices in Hong Kong,
Shanghai, Beijing, Tokyo and Mumbai.
BayernLB's office in Milan is also to be shut down and its
operations in New York and London are to be reduced.
After being badly hit first by the fallout 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 was likely to run
up bigger-than-forecast losses of 3 billion euros this year 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.
BayernLB is to receive 10 billion euros in extra funds from the
state of Bavaria, along with debt guarantees of 15 billion euros
from the German government's bank rescue package.
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