Commerzbank weighs cuts to London investment bank activities: sources

COMMERZBANK (CBK.XE)plans to shift around half of its roughly 250 FIC staff in London - which already saw a headcount reduction of about 20 percent this year - to Frankfurt, said two sources who declined to be named because they are not authorized to speak to the media.

Like all investment banks, the bank is suffering from sluggish demand for products like interest rate hedging and forex hedging as interest rates remain at historic lows and market volatility remains subdued.

"An exact number has not yet been decided," one of the sources said, adding 40-60 percent of the London FIC staff may be affected. "Many London-based employees will not want to move to Frankfurt and likely leave the company."

Commerzbank declined to comment on any possible job cuts but said that no change in services for clients was under consideration.

"London remains key to Commerzbank?s international operations and the investment bank?s offering to clients remains unchanged across all asset classes," a spokeswoman said in a written statement.

The FIC unit is part of Commerzbank's investment banking division, which altogether employs roughly 1,800 staff. It saw revenues slip to 505 million euros last year from 639 million euros in 2010.

Separately, Commerzbank is cutting 60-70 FIC staff at its home base Frankfurt, a 'fine tuning' that is not part of this group-wide cost-cutting measure, the people familiar with it said.

In July, sources familiar with Commerzbank said the lender was widening the scope of its cost-cutting program and planned to shed more than 450 jobs on top of the 5,200 already announced.

(Reporting by Arno Schuetze; editing by Thomas Atkins)

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