While Deutsche Bank AG yesterday acknowledged that more job cuts must come after it posted its first quarterly loss in five years, officials did not say how those plans might affect the bank's Deutsche Banc Alex. Brown Inc. unit in Baltimore.
"We would be bad managers if we ruled out further job cuts anywhere in this large company so early in the year," said Deutsche Bank board member Tessen von Heydebreck.
A spokesman at Deutsche Bank's U.S. headquarters in New York declined to speculate on whether there would be more jobs lost at Alex. Brown."
The fourth-quarter loss of $86 million announced yesterday was the Frankfurt-based bank's first quarter in the red since 1997, and was attributed in part to a $250 million charge taken to pay for job reductions.
Reserves to cover loan losses were also an issue, more than doubling to $860 million. Two of the culprits: exposure to Argentina and exposure to Enron Corp., the U.S. energy trader that filed for bankruptcy protection Dec. 2.
Deutsche Bank earned about $500 million in the year-earlier fourth quarter.
"The year 2001 was a great challenge," chief executive Rolf-E. Breuer said in a statement. "Deutsche Bank has held its own in the face of weak international financial markets."
As part of its plan to eliminate 9,200 jobs worldwide, Deutsche Bank wanted to eliminate 2,100 jobs in its investment banking business - 900 of them in the United States.
Although it took the charge against earnings for those reductions in the fourth quarter, the bank will continue its job-cutting campaign this year, said Norrie Morrison, an analyst who follows Deutsche Bank for Arnhold & S. Bleichroeder in New York.
"It will help" profits rebound, Morrison said. "But it will take time."
The local Alex. Brown unit has felt the fallout of these cost-cutting efforts. Nineteen of its investment bankers, analysts and clerical workers were recently terminated.
Alexander Mason, chief operating officer of the unit's finance division, said executives here "believe this is everything we will have to do. We really do not expect that we are going to have to do any more [cutting] here."
One bright note was that Deutsche Bank's quarterly loss was less than that of rivals Credit Suisse Group, Merrill Lynch & Co. and J.P. Morgan Chase & Co.
"Last year was a horrible year for financial services and these companies are still in a very difficult environment," said Stephane Wuethrich, who helps oversee about $470 million at Trafina Asset Management.
Deutsche Bank plans to lower its costs and revive its profits this year, partly by shutting 490 branches across Europe. And it will incur additional costs for job reductions this year, Chief Financial Officer Clemens Boersig said.
Full-year earnings tumbled by a more-than-expected 67 percent, excluding tax and accounting changes, to about $1.2 billion, or about $1.90 a share. Analysts were expecting a profit of just under $2 billion.
Bloomberg News contributed to this article.