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HVB Records Huge Losses, Plans Job Cuts

February 24, 2005

HypoVereinsbank (HVB), Germany's second-biggest bank, announced plans on Thursday to cut 2,200-2,400 jobs in its domestic operations as it remained entrenched in loss last year, according to AFP. HVB said in a statement it booked a bottom-line loss of €2.278 billion ($3 billion) in 2004 after already running up a net loss of €2.369 billion in 2003 and €900 million a year earlier. The loss was nevertheless not as heavy as analysts had been expecting, with forecasts chalking in a shortfall of around €2.4 billion. The hole in HVB's accounts was torn by massive €2.5 billion in writedowns on its real estate portfolio. In order to boost earnings, HVB confirmed reports that it was planning to axe 2,200-2,400 jobs in Germany. Sources said the cuts would primarily affect the bank's back-office operations and technical services. The aim of the cuts was to save at least €280 million each year by 2007.

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