The two entities would initially remain under the control of a single holding group, the spokesman said, confirming a report in the German daily Frankfurter Allgemeine Zeitung.

No job cuts were foreseen, he added, speaking after a meeting of Dresdner Bank’s supervisory board that sealed the deal. Allianz appeared to be gearing up for an active role in consolidation of the German banking sector by preparing Dresdner either for a complete break-up or a merger.

The announcement had been expected because the investment bank division, known as Dresdner Kleinwort, has posed problems for some time and has been hit hard by the US subprime home loan crisis. The Frankfurt-based unit announced 450 job cuts last year from a workforce of around 6,000.

Dresdner Bank, meanwhile, booked write-downs totalling €1.5 billion ($2.35 billion) and posted a net profit of €366 million. More write-downs could not be ruled out this year, Allianz had said when it presented annual results last month.

The Frankfurter Allgemeine Zeitung had quoted Dresdner sources as saying that one of the two entities would consist of the investment banking operations while the other handled the private and corporate clients business.

“Two separate independent banks will be created,” the sources said. “We are creating the flexibility to play an active part in the banking (sector’s) consolidation,” they were quoted as saying.

German reports have said Allianz was interested in acquiring Deutsche Postbank so as to merge it with Dresdner’s retail operations. Analysts have urged Allianz for years to get rid of Dresdner Bank, for which the insurer paid a handsome sum in 2001, and concentrate on its core insurance business.