News In Brief
A megamerger that will create the world's largest bank also will result in the loss of 16,000 jobs, industry sources in Germany said. Deutsche Bank and Dresdner Bank are to offer details today on their linkup, which would give them a combined $1.2 trillion in assets. But analysts said the merged company would restructure its relatively weak retail banking operation, closing up to one-third of its 3,000 branch offices and adding to Germany's already high 10 percent unemployment rate. Three Japanese banks have OK'd a merger that would propel them to No. 1 in the world, but it isn't due to be completed until 2005.
Downsizing could cost up to 16,000 employees their jobs at Australia's largest company as well, it announced. Telstra, the partly government-owned telecommunications giant, is in transition "from a phone company to a 21st-century electronic information services company," its chief executive said. But critics say Telstra is hampered by having to fulfill social responsibilities imposed by Parliament and is growing at half the rate of the rest of the industry.
A $4.8 billion merger may be announced as soon as today, reports said, between Commonwealth Bank of Australia and Colonial Ltd., whose main business is life insurance and funds management. The deal is seen as a harbinger of further "second tier" mergers among Australian financial institutions. Government policy forbids the continent's largest retail banks from absorbing one another.
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