Deutsche Bank is to outsource its software development division, leading to the loss of 680 jobs in Germany, according to a report by the Financial Times.
Bank staff were informed of the news at a meeting held last Wednesday in Frankfurt. Five software development divisions will be affected, which currently employ 800 people. The report says only 20 per cent of these will be retained by the bank.
Deutsche Bank hasn't confirmed that any decision has been taken.
According to the FT, the division developing SAP appliances would be the first to go. The bank is also reported to be in negotiations with IT service providers IBM and Deutsche Telekom subsidiary T-Systems, who are carrying out due diligence.
The FT quotes Ulrich Meister, in charge of IT for personal and corporate banking at Deutsche Bank, who says 20-30 per cent of costs could be saved if software development was outsourced.
The bank outsourced its European data processing centre to IBM in February saving an estimated €10m per year.
The FT is also reporting that Deutsche Bank is close to selling part of its property portfolio to private equity firm Blackstone for about €1bn. The sell off is part of the bank's plans to free up capital from non-core activities.
Blackstone is set to buy around 50 Deutsche offices and branches in cities including Barcelona, Brussels, Milan, Lisbon, Luxembourg, Düsseldorf, Munich and Zurich. The bank's supervisory board is expected to vote on the sale in the next few weeks.
The deal includes the bank's new investment banking headquarters in Frankfurt, a new builiding currently under construction, the old Deutsche Bank banking hall in Milan and a regional stock exchange building in Germany. The bank is expected to continue to occupy most of the properties on long leases.