Dresdner Bank is reorganizing its U.S., Canadian, and Mexican operations under a single management to reduce costs, improve distribution, and keep pace with market integration in North America, the bank's chairman said Thursday.
The reorganization will bring Dresdner's Canadian banking subsidiary, U.S. commercial banking branches, and its investment banking unit, Dresdner Securities (USA) Inc., under a single holding company. Individual North American operations will now report to New York, rather than Frankfurt.
The New York-based holding company will be headed by George Fugelsang, president of Dresdner Securities and chief executive of the German bank's U.S. branch operation. It will be run by a committee comprised of managers of the bank's different business entities.
Dresdner will also develop closer relations with the Miami branch of Deutsche Sudamerikanische Bank AG, a Dresdner unit which has a substantial commercial banking network in Latin America, and with France's Banque National de Paris, or BNP.
Legalities Are Weighed
Dresdner and BNP have a strategic alliance in Europe and are planning to jointly apply for a banking license in Mexico. Dresdner Chairman Juergen Saarazin said the bank was still investigating whether a joint Mexican unit is legally possible.
Dresdner, Germany's second-biggest bank after Deutsche Bank AG, has $220 billion of total assets, including some $10 billion in the U.S.
In the United States, Dresdner operates through branches in New York, Chicago and Los Angeles. It also owns Dresdner Securities (USA) and a Chicago-based subsidiary of Banque Internationale de Placement which is active in fixed income, foreign exchange and equity derivatives.
Dresdner's North American operations are likely to grow substantially over the next few years, Mr. Saarazin said.
Dresdner plans to increase its derivatives and capital-market activities help bring German companies to U.S. capital markets.
Double-Digit Gains Seen
Dresdner intends to remain equally active in commercial and investment banking, Mr. Saarazin maintained. "Both activities play an important role. It just depends on the economic cycle."
The reorganization should lead to a "double digit" improvement in profits in North America by reducing costs and improving distribution. It will not lead to any reduction in Dresdner's 600-strong U.S. workforce, Mr. Saarazin said.
Dresdner has long kept a low profile in the United States but recently launched a $1.2 billion international equity offering, partially placed with U.S. investors.
Dresdner is considering, but has not yet applied for, a New York Stock Exchange listing.
