GUEST COMMENT: Oh my God... they killed Kleinworts!

As Commerzbank's protracted integration and restructuring process gets underway one thing is becoming apparent: there is no intention of maintaining significant investment banking operations in London.

Commerzbank has cut back on the proprietary trading operations in their entirety (no bad thing in the context of Dresdner Kleinwort'sperformance in recent years). It's also cut the equities business as a whole. And it's cut the old Dresdner Kleinwort M&A business.

In less than 12 months, what remained of the once mighty institution of Kleinwort Benson has been reduced to rubble.

Many businesses were viable

Many of its businesses were perfectly viable: the UK corporate broking business was not bad; the equity research platform was relatively well-rated; the ECM business had been involved in landmark transactions such as the $10bn IPO of Rosneft in 2007; and the M&A business had a strong global footprint, having advised the likes of Sinopec, IPIC, Petronas and QIA in recent years.

So what now for the 3,000 or so people who were based at Gresham Street?

Those who retain their jobs are likely to remain in situ. Commerzbank has taken a liking to the building, constructed in 2006, and is planning to move its staff there by the end of the year.

The Dresdner Kleinwort veterans who remain will certainly have to re-adjust - the culture of the two institutions couldn't be more different. Contrary to popular belief, barring the very top line of management, Dresdner Kleinwort very much retained the culture of a City investment bank (Allianz and Dresdner Bank featured very little in the thoughts of most staff in London). A lot of the Kleinwort history made itself felt and was still a source of pride for some. Admittedly the 1990s and early 2000s saw waves of cuts and departures of notable names (such as Shacklock and much of the Wasserstein cohort), but some of the 'old-timers' have remained closely associated with the bank (Lord Walker and Alan Yarrowfor example).

And those who are leaving? Most of those departing have found homes elsewhere in the City - testimony to the fact that Dresdner Kleinwort still employed some quality people right up until its effective death in 2009. A large portion of equities staff have resurfaced at fast growing houses such as Evolution and Execution. The corporate broking team has moved only a few hundred yards further up Gresham Street to Investec. Ex-Dresdner Kleinwort M&A staff have moved to highly respected names such as Greenhill and Perella Weinberg; most of the FIG team have moved across toMichael Tory's newly found Ondra Partners.

It would be unfair to say that none of them are glad to leave, but for the most part it is not Dresdner Kleinwort that theyare happy to be leaving, but the decimated establishment that it has become. Commerzbank is, in essence, a struggling German retail bank that also plays in the lower leagues of the DCM market.

Dresdner not solely to blame for problems at Commerz

An in-depth study of their business and its exposures to loss-making loan portfolios in the German and CEE markets and ship financealso reveals that the bailouts it has received from Angela Merkel's government are not wholly attributable to Dresdner, and Dresdner Kleinwort. Most pundits also forget that Dresdner Kleinwort by itself never had the balance sheet to expose itself so massively to 'toxic assets' - a lot of this was actually sitting on the parent's books in Frankfurt.

But that is a whole piece by itself, and whatever the truth behind it is, it cannot change to course of history as experienced by Dresdner Kleinwort now. Anyone whohas seenthe 30 Gresham Street offices in full flow would be taken aback by the place now - an impressive building that feels deserted. Most of the front office floors have a skeletal presence and the lights are out by 7pm in any evening - early by anyCity standards. Those who remain are generally biding their time, looking to exit as soon as the right opportunity arises.

Bad feeling towards the new masters

There is an air of bad-feeling towards the new masters. The well-documented bonus issue and protracted integration process (with no voluntary redundancy on offer) made this inevitable. More importantly, it has not served to do any favours to Commerzbank's reputation in the market- many of those who have departed are keen to avoid doing business with this bank.

The nature of the market and, in particular, the nature of investment banking means that outside of Dresdner Kleinwort there will be few, if any, tears shed for this venerable City name. A similar fate befell Barings when it fell into the hands of ING in 1995. And there is no doubt that in 2008, when Dresdner Kleinwort staff probably felt relatively safe under the arm of Allianz, they were only too glad to see Bear Stearns fall (although one can rightfully point to the fact that that establishment had little historical connection with the City). However, notwithstanding the causes of the fate suffered by Kleinwort, one should reflect on what is a sad loss of a name with over 200 years of history, if only to learn the lessons from its failure....

Farewell Kleinworts, the last of the English merchant banking names...