Restructuring events
European Restructuring Monitor (ERM)
The restructuring events database contains factsheets with data on large-scale restructuring events reported in the principal national media and company websites in each EU Member State. This database was created in 2002.
BayernLB, the central banking institution of Bavaria, is one of the leading regional banks in Germany and an international player. In 2008, BayernLB made a net loss of EUR 5.1 bn and needed cash injections of about EUR 30 bn. from the German and Bavarian governments. Restructuring plans were made public in December 2008, but no details were given and the restructuring plans have not been approved yet by the EU Commission. However, the restructuring programme 'Hercules' is under way and German media refer to the planned job cuts (5,600 jobs) as a given fact (FTD 02-10-09). In the following we refer to a March 2009 article by Süddeutsche Zeitung which relies on internal BayernLB information.
The restructuring is meant to streamline the multinational operations of BayernLB which holds subsidiaries in Luxembourg, Austria and eastern Europe. According to Süddeutsche, the centralized management structure of Unicredit is taken as an example. 5,600 out of a total of 19,200 international jobs shall be cut. Subsidiaries and foreign activities shall be sold - if possible - or shall be managed directly from Bavaria.
Most job cuts, about 2,100, are said to affect Hypo Alpe Adria, the Austria-based subsidairy focussing on eastern Europe which most probably cannot be sold. Hypo Alpe Adria made a net loss of EUR 520 mn in 2008 and was bailed out by its 67 percent owner Bayern LB and by the Austrian government. Hypo will reduce its staff by 2,100 over the next five years, according to an Reuters article.
BayernLB's restructuring plans are to be seen in line with the situation of other regional German banks (see factsheets on LBBW and WestLB).
Eurofound (2009), BayernLB, Hypo Group Alpe Adria, Internal restructuring in European Union, factsheet number 69669, European Restructuring Monitor. Dublin, https://dev.eurofound.europa.eu/restructuring-events/detail/69669.
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