Dresdner pushed for swift decision on DKB

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The Independent Online

Senior executives at Dresdner Kleinwort Benson, the City investment bank, flew to Frankfurt yesterday for a round of urgent weekend meetings about their future with Bernd Fahrholz, Dresdner's new chief executive.

They are pushing the bank quickly to install a new management structure that would underline the autonomy of the investment bank and prevent a further haemorrhage of staff over the next few days.

Insiders say the model would the Swiss banks, where Warburg Dillon Read and CSFB enjoy considerable independence from their respective parents, UBS and Crédit Suisse.

Some staff in London favour seeking a new owner for the former Kleinwort Benson, although the German investment bankers believe the UK and German businesses are too integrated to make an outright sale of the business feasible.

Earlier Bernhard Walter, the outgoing Dresdner chief executive, told analysts that by the end of March, 350 senior executives had resigned from the bank, 100 of them in the investment bank.

Mr Walter announced his resignation on Thursday night after the collapse of the 30bn-euro merger with Dresdner's rival Deutsche Bank.

The merger had collapsed over the insistence of senior Deutsche investment bankers that DKB should either be sold or "torched" if the merger went through.

Mr Walter admitted that revenue would be hit by the "turbulence" of the past few weeks and that more than 100m euros was spent on retention bonuses for DKB staff.

Staff on the dealing and research side of DKB yesterday celebrated their reprieve by running off T-shirts bearing the slogan: "I've not been torched." These were the ones whose jobs would have been most likely to be axed had the merger not collapsed.

However, bankers say the corporate finance business, which Deutsche had wanted to keep, is less sanguine about its future, particularly as Dresdner is seen as being highly vulnerable to a bid. Mr Walter reinforced that belief when he said yesterday that the bank could not rule out "any sensible solution".

Senior DKB bankers said yesterday that they believed Mr Fahrholz would be more receptive to the needs of the investment bank than Mr Walter, who, bankers say, failed to involve other board members in his pre-merger discussions with Deutsche at an early enough stage.

Mr Fahrholz, while not himself an investment banker, has a background in specialist finance and corporate lending, which has involved close contact with the investment bank.