FRANKFURT German private bank staff have struck a deal with employers for a 10.5% pay increase to cope with rising living costs, union and bank representatives said on Thursday.

The agreement, affecting some 140,000 workers, was agreed late on Wednesday in a third round of talks that followed a series of strikes.

The Verdi and DBV unions had originally demanded increases of 12.5% and 16%, respectively. But banks have been trying to keep a lid on costs.

Jan Duscheck, chief negotiator for the Verdi labour union, said the increase will provide "noticeable relief". AGV, the association representing employers, called the deal "fair".

Inflation rates in Germany have come down significantly from nearly 7% in 2022 - the highest pace in decades - but the 2.2% rate for June is still higher than many Germans are used to.

The agreement is valid for 28 months and it effects listed banks such as Deutsche Bank and Commerzbank.

Deutsche, Germany's largest lender, has been seeking to cut expenses to reach ambitious targets next year.

The bank had already factored the wage agreement into its financial planning and nothing has changed, said a person familiar with the matter.

In May, unions and Deutsche Bank's management reached a deal for thousands of the lender's Postbank employees, putting an end to months of wrangling and strikes. Employees won a 11.5% increase in two steps.

  - Reuters