900 go as WestLB doubles job cuts

GERMAN bank WestLB is to cut a further 900 jobs, doubling its redundancy programme in an attempt to return to profit.

The group said it aimed to reduce costs by e500m (£352m) a year. Employee numbers would fall to 6200 from 8000 by the end of 2005. Half of those 1800 cuts were announced in August.

The bank's supervisory board met in Dusseldorf on Tuesday to discuss strategy as it seeks to stem losses and tighten up risk management procedures criticised by German financial regulator BaFin.

WestLB said today that it was 'reviewing its non-core shareholdings', raising questions over the future of its Principle Finance Unit headed by Robin Saunders, and its WestLB Panmure unit, its incarnation of one of the City's most venerable brokers. WestLB confirmed a sale of Panmure is 'an option under consideration'.

Panmure appears set to re-emerge as an independent group before the end of the year through a £50m deal with its parent. It is understood management buyout talks are at an advanced stage. Panmure, founded 127 years ago, was bought by WestLB in 1996 when it was known as Panmure Gordon. It has suffered severe staff cuts since then, leaving it with 76 people.

Panmure chief executive Tim Linacre and business manager Jeremy Davis are said to have discussed a buyout with Manfred Puffer of WestLB's management board last week in a four-hour meeting, during which insiders say a tentative deal was agreed.

Linacre today declined to confirm the meeting. The division has more than 70 corporate broking clients including Safeway, WPP and hotels group Six Continents.

WestLB has said its supervisory board would examine plans to return the bank to its 'domestic banking roots' but would keep some international investment banking operations. Germany's Die Welt newspaper reported that the company is aiming to sell its 31% stake in German tour operator TUI - owner of Britain's Thomson Holidays - before the end of the year.