Asia blamed for profit slump at DMG

DEUTSCHE Bank yesterday blamed the Asian crisis for a 13 per cent slump in profits at Deutsche Morgan Grenfell, its investment banking arm.

Profits at DMG were 777m German marks (pounds 250m) in 1997, compared with DM896m in 1996. Although the figures for DMG's corporate finance and advisory unit were understood to be particularly disappointing, rumours have swept the City that Carter McLelland, the former co-head of the division, received bonuses of more than pounds 2m last year.

Mr McLelland, along with his co-head Maurice Thompson, resigned his post after the appointment of Bill Harrison, the former Barclays' investment banking chief, as global head of corporate finance and advisory.

Mr Harrison now faces the tricky task of merging DMG's corporate finance and advisory wing with the top end of Deutsche's corporate banking division. Further details of this merger - first unveiled earlier this year - were provided yesterday.

Sources estimate Deutsche will transfer 3,000 people from its corporate banking division to DMG. The bank is expected to cut 1,200 DMG jobs outside of Germany.