A bank controlled by the German City of Berlin has announced that more than a quarter of its 15,000 strong workforce will be cut.

The job cuts come as the bank is forced to deal with a 369m euros loss for the first nine months of this year, on top of last year's massive 1.65bn euros loss.

The chief executive of Bankgesellschaft Berlin, Wolfgang Rupf, has resigned, along with two other directors.

And the troubled bank, which lost its shirt in the real estate market, has decided to focus on retail banking in the future.

Restructuring

The Berlin bank's problems stem from a series of risky loans made to pay for the rebuilding of the city after the fall of the Berlin wall in 1989.

Much of the lending was controversial and rumours have been rife about unauthorised payments being made by construction firms to politicians in the city.

Berlin city has been forced to cough up several billion euros to bail out the bank; expences it can ill afford given its own mountain of debts.

The city's 78bn marks debts have mounted ever since Western purse strings were tightened after the end of the Cold War, ending its existence as a greatly subsidised Western outpost.

High unemployment and a rigid bureaucracy continue to marr the city.