This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7193256.stm

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Deutsche Bank makes 300 job cuts Deutsche Bank makes 300 job cuts
(about 2 hours later)
Deutsche Bank has said it plans to cut 300 jobs amid continued financial market woes. Deutsche Bank has said it plans to cut 300 jobs at its global markets arm as worldwide credit problems cut into expected earnings growth.
The German bank is the latest financial services firm to reduce its workforce as the credit squeeze hurts business and cuts into profits. The German bank is the latest financial services firm to reduce its workforce, with Citigroup, Bank of America, and UBS also planning to lay off staff.
But analysts have said the job cuts are modest compared with its peers. They have decided to cut costs after the value of investments linked to the US housing market tumbled.
Earlier in the week, Citigroup said it would shed 4,200 jobs after reporting a $9.83bn net loss for its last quarter. UBS announced 1,500 job cuts last year. Deutsche Bank's redundancies are modest compared to its peers, analysts said.
A Deutsche Bank spokesman said the job reductions would occur in the firm's investment banking division, with the savings redirected to toward areas with greater growth potential. A Deutsche Bank spokesman said the job reductions would occur in the firm's sales and trading division, with the savings redirected towards areas with greater growth potential.
The Frankfurt-based firm reported a loss in earnings for this unit for its third-quarter and said warned that investment banking revenues would remain "significantly" below recent highs in the months ahead.
It has about 13,000 staff working in that unit around the world.
Deep impactDeep impact
Banks worldwide have been deeply affected by billions of dollars of investments centred on US home loans given to people on low incomes or with poor credit. Banks worldwide have been deeply affected by billions of dollars of investments centred on US home loans given to people on low incomes or with poor credit histories.
When interest rates were cheap, this sector rapidly expanded and helped to boost the coffers at financial institutions.When interest rates were cheap, this sector rapidly expanded and helped to boost the coffers at financial institutions.
But with interest rates at six-year highs as recently as last summer, these home buyers have become unable to afford the mortgage repayments they agreed to. But when interest rates rose to six-year highs last summer, many of these home buyers struggled to meet their mortgage repayments.
This has led to record defaults and forced banks to mark down the value of investments in this field. This has led to record defaults and forced banks to mark down the value of investments.
Deutsche Bank announced in October that it would need to write down 2.2bn euros ($3.2bn; £1.64bn) stemming from bad investments in this area. Deutsche Bank announced in October that it would need to write down 2.2bn euros ($3.2bn; £1.64bn) stemming from these bad investments.
The amount of damage the US housing crisis has caused to the financial sector has come under attention again this week with US banks reporting earnings for their last three months of 2007. Industry problems
The focus on Thursday is on Merrill Lynch, which has been rocked by its US sub-prime exposure and recently lost its long-serving chief executive Stan O' Neal as a result. By comparison, Citigroup posted a $9.83bn net loss for the last three months of 2007, after writing down $18bn-worth of bad debts earlier this week.
It said it would have to reduce its staff count by 4,200, in addition to the 17,000 job cuts the group said it planned to make last April.
Swiss bank UBS has so far written off about $14bn in debts and says further losses are possible if the US housing market remains in the doldrums.
In October last year, the group said it would shed 1,500 jobs and announced a management shake up.
Analysts said that there may be more bad news when Merrill Lynch releases its earnings for the last three months of 2007 later on Thursday.