Dresdner Bank

April 12, 2002

Dresdner investment bank plans more lay offs

Dresdner Kleinwort Wasserstein (DKW), the investment banking unit of Dresdner Bank, has announced to lay off 200 jobs. This is in addition to 1,500 jobs from June last year. Ever since it has integrated with the group’s corporate banking business, last July, DKW has embarked on a cost cutting exercise. The lay offs are a part of the exercise. DKW, which at present employs 13, 500 people, plans to cut its workforce by 15% by 2003.

Meanwhile Dresdner Bank, which was acquired by Allianz for €24 billion last year, revealed that it had incurred a loss of €505 million. Last year it had recorded a profit of €1.2 billion. Lack lustre equity markets, dwindling mergers and acquisitions, bad provisions and mounting restructuring costs have been the major reason for adverse result.

Meanwhile, Dresdner’s net profits declined by 90% to €180 million, dividends were cut by 20% to 70 cents.

March 25, 2002

Dresdner may be investigated over bets scam

Dresdner Kleinwort Wasserstein is likely to be questioned by the Financial Services Authority about its involvement in the rigging of Cyprotex shares.

Paul Davidson a pipe-fitting businessman, and a principal shareholder in Cryportex, placed a £6 million bet with a spread-betting company City Index that Cryprotex’s shares would rise.

City Index hedged the bet through an agreement with Dresdner, which in turn insured itself by purchasing Cyprotex shares worth £5 million. The purchase lead to a rise in share price above their 29p flotation value. It has now declined to 28.5p.

The FSA is investigating into the wager, which may have lead to manipulation of share prices. Dresdner denied any mishandling of shares. Davidson expressed ignorance of Dresdner’s participation and stated that he had obtained legal advice. In case of any fraudulent activity such as market rigging, the FSA has the powers to impose unlimited fines.

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