Breuer warns of Deutsche job cuts and German exit

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Rolf Breuer, chairman of Deutsche Bank's supervisory board has said it is considering further job cuts and the possibility of re-locating its headquarters outside Germany.

He said the bank's supervisory board was "talking intensively" about restructuring the bank.

Breuer, Deutsche chairman from 1997 to 2002, said Germany's banking sector was "completely overstaffed" and therefore any restructuring discussions would involve talk of job cuts.

He gave no indication on the number or timing but suggested an interview with Stern magazine, a German weekly, that they would most likely centre on Deutsche's German retail banking operations. The full interview is due to be published on Thursday.

Breuer refused to discount the possibility of moving the bank's headquarters abroad, saying that due to high taxation and strong trade union influence, "Germany isn't a natural site for holding companies."

Deutsche Bank declined to comment.

Sources close to Deutsche suggested that Breuer's remarks should be seen in the context of his role as head of Germany's Private Commercial Banking Association.

Earlier this month Anshu Jain and Michael Cohrs, newly-appointed global co-heads of corporate and investment banking at Deutsche Bank, pushed through a worldwide restructuring of the firm's investment banking business to improve performance.

At the time Josef Ackermann, chief executive, said of the changes: "The alignment of complementary business lines and streamlining of the bank's management structure will unlock revenue and cost synergies, paving the way for the bank to achieve its stated goal of a 25% underlying pre-tax return on equity by the end of 2005."

The bank is due to report results for the three months to September 30 this Friday. Sigrid Baas, an analyst at ING Financial Markets, is expecting pre-tax profits of €816m. The bank reported €755m pre-tax profits in the third quarter last year.

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