Dresdner Bank is re-organizing its operations with a merger and job cuts to reach a profitability target of 12% return on equity by 2008.
The Frankfurt-based bank, a unit of insurer Allianz, will combine its Dresdner Kleinwort Wasserstein unit with its corporate banking division and has hired Stefan Jentzsch to head the merged unit. German newspaper Frankfurter Allgemeine reported the bank will also cut between 2,000 and 3,000 jobs, although the cuts should not involve redundancies.
Chairman of the board of managing directors Herbert Walter said: These measures, which form part of our New Dresdner Plus program, will allow us to lay the foundations for our future profitability and high growth.
Dresdner Bank’s net income fell 5.8% to E113 million in the third quarter, which was below market expectations according to Bloomberg. The group is hoping to see the bank turned around, and Mr Walter said in a statement that it is well on the way to earning its cost of capital this year, although it said that this is only an intermediate goal.