Dresdner Kleinwort's chief executive became the first casualty yesterday of the takeover of the Dresdner empire by Commerzbank, the German giant. Stefan Jentzsch told staff at the investment bank that he will step down at the start of next year.

Mr Jentzsch will be followed out of the door eventually by about half of Dresdner Kleinwort's 2,000 workers in the City, and the name of Kleinwort, which dates back to 1786 and represents one of the most historic names in banking, will be cast into oblivion.

It is one of the biggest staff culls in London for many years and follows Commerzbank's €8.8 billion (£7.1 billion) takeover of Dresdner Bank, of which the investment bank is a subsidiary. The first half of the deal, in which Commerzbank will acquire 60.2 per cent of Dresdner from Allianz, the German insurer, in return for about €3.4 billion in shares and €1.6 billion in cash, will be completed by January.

Martin Blessing, chairman of Commerzbank's board of managing directors, will run the combined group.

Insiders said that staff likely to be retained at Kleinwort's London offices included those working in fields such as equity derivatives and debt finance. Those expected to be cut worked in areas such as proprietary trading and structured credit. Commerzbank said that it would achieve a total of €1.9 billion in cost synergies from the deal by 2012, including €850 million in commercial banking and just over €1 billion in investment banking. It said that personnel costs would provide about half the cost synergies.

About 9,000 job losses are expected from the two banks' 67,000 labour force, with about 2,500 jobs to be cut outside Germany.

The deal will be completed by the second half of next year, when Allianz receives a further payment in shares, expected to be worth about €3 billion, from Commerzbank in return for the remaining 39.8 per cent of Dresdner.

Commerzbank will put €975 million in a trust account for Allianz, to be paid out if Dresdner does not take any more charges by 2018. It has already been hit by $5 billion in writedowns and has $4.5 billion in remaining exposure to structured credit.

Because much of the deal is in shares, Allianz will end up holding about 30 per cent of the enlarged Commerzbank. The insurer will also buy Cominvest, Commerzbank's fund management business, for €700 million.

The sale is an embarrassment for Allianz, which paid €24 billion for Dresdner in 2001. The insurer had hoped to sell bank accounts to Allianz customers, as well as products such as car insurance, but the insurance specialists struggled to control Dresdner's investment banking business, allowing it to rack up sustantial losses.

Analysts said that the integration of Commerzbank and Dresdner would be difficult. Dirk Becker, at Lands-banki Kepler, said: “It is a huge integration. We will see in half a year that something will go wrong.”

There will be restructuring charges of €1.2 billion. Sources said that few changes were expected at Dresdner until the end of this year, after Commerzbank has obtained regulatory and legal approval for the deal.

In Frankfurt, Commerzbank's shares were down more than 10 per cent, or €2.05, at €18.04.

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