Feb. 2 (Bloomberg) -- Deutsche Bank AG, Germany’s biggest bank, plans to cut bonuses at the securities unit by an average of 60 percent after reporting a record loss, a person with knowledge of the situation said.

Business units hardest hit by the financial crisis such as structured products and proprietary trading will face larger reductions than areas including foreign exchange and commodities, said the person, who declined to be identified because the plan isn’t public. Focus Magazin reported the bonus plan earlier.

Chief Executive Officer Josef Ackermann, who along with other top executives is forgoing his bonus, is slashing variable pay after the worst financial crisis since the Great Depression pummeled stock and bond trading. UBS AG, the European bank with the highest losses from the credit crisis, shrank its bonus pool for 2008 by more than 80 percent.

“Bonuses are going to be cut in a bad year and everything related to mortgage securitization and prop trading is going to suffer most,” said Dirk Becker, a Frankfurt-based analyst at Kepler Capital Markets who recommends buying the shares. “At least Deutsche can determine bonus payments itself, unlike UBS, where the state has a say.”

UBS, Commerzbank

Zurich-based UBS reduced bonuses after it was forced to accept a $59.2 billion government aid package in October. Ackermann, 60, has so far resisted pressure to take state aid and raise capital.

Commerzbank AG, Germany’s second-biggest lender, is reviewing about 400 million euros ($510 million) in bonuses pledged to bankers at its Dresdner Kleinwort securities unit.

Cash bonuses paid to New York City employees of Wall Street firms declined 44 percent last year amid record losses in the securities industry, state Comptroller Thomas DiNapoli reported last week. Financial firms disbursed $18.4 billion, compared with $32.9 billion in 2007, DiNapoli’s office calculated, basing its estimate mainly on personal income-tax collections.

Banks worldwide have slashed more than 265,000 jobs since the beginning of the crisis, data compiled by Bloomberg show.

Deutsche Bank’s corporate and investment bank, which includes the securities unit and transaction banking, reported a 38 percent decline in compensation and benefits, including fixed and variable pay, in the first nine months of last year compared with the year-earlier period.

Deutsche Bank spokesman Frank Hartmann declined to comment. The Frankfurt-based lender is scheduled to report fourth-quarter and full-year earnings on Feb. 5 after releasing preliminary figures on Jan. 14.

To contact the reporter on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net

Last Updated: February 2, 2009 08:14 EST