Sydbank, Denmark’s fourth largest lender, has announced cuts of 89 jobs across the bank and is in negotiations to axe its Swiss private banking division, as a morbid economic outlook weighs on costs.

The 89 employees are based in functions jobs in Denmark and represent 4 per cent of the firm's entire workforce. The bulk of the redundancies are being made in cashier services which can be easily streamlined, confirmed a spokesperson. This is the latest round of redundancies for the bank, after it reduced its ranks by 300 during the course of 2009 and 2010. At the time this represented 12 per cent of the headcount of 2,479 at the end of 2008. 

As well as cutting costs from the bottom up, it is also raising interest rates of floating-rate loans by up to 0.5 per cent as of 14 October 2011. The premium of loans and credits where interest rates are related to a market rate, will also be increased as of the same date.

“As a consequence of the continued setback in the economy it is not longer sufficient to keep costs at an unchanged level. These increases are based on the continuing turmoil in the international financial market which causes increasing funding charges for the banks,” said a statement signed by chief executive officer Karen Frosig

Swiss exit, German expansion

Sydbank is also in negotiations to wind down its nine year-old St Galen-based private banking arm, Sydbank (Schweiz), which houses between 25 and 30 employees, according to a spokesperson.

Most of Sydbank’s private banking clients have been bought by competitor Nordea International Private Banking, based in Switzerland.

Meanwhile, Sydbank is looking to grow its German business, acquiring the private banking activities of Gries & Heissel, a Berlin und Wiesbaden-based boutique. According to the agreement, Sydbank will officially take over the bank as of 1 January 2012. The German private bank has around €52 million ($71 million) of assets under management and 33 employees.

The service of retail clients domiciled outside of Denmark will be managed out of the bank’s German offices.

Sydbank had 2,280 employees and total assets under management of DKK150.84 billion ($27 billion) as at the end of 2010.