WestLB, the German bank that lost €604m ($825m) from its proprietary trading business during the credit crisis, is preparing to cut up to 600 jobs in its home market as it paves the way for a merger with a rival.

The job losses, which amount to 10% of its German banking staff, will come from its offices in Düsseldorf and Münster. The potential job cuts are supplementary to an internal programme called the "lean bank initiative" launched in 2005 by former chief executive Thomas Fischer. Fischer was replaced as chief executive last month by Alexander Stuhlmann in the wake of a trading scandal and a first half net loss of €170m.