BayernLB Holding AG, the second-largest federal state bank in Germany, is expected to announce a new cost-cutting program Dec. 19 as it seeks to mitigate the negative effects of the low rate environment, Börsen-Zeitung reported Dec. 13.

Stephan Winkelmeier, who took over as CEO of the Bavarian landesbank in July, has been working on a new restructuring plan since he joined, according to the report. Costs are one of the key concerns of the state of Bavaria and the local savings banks as the high reliance on net interest income makes German banks more exposed to the lower-for-longer interest rate trend in Europe.

BayernLB's plan is said to include redundancies, Börsen-Zeitung said, citing Reuters. The lender's headcount stood at 7,700 as of 2018-end, the newspaper said.

Landesbanken such as BayernLB are owned by the German federal states and regional savings banks associations. They act as central institutions for the savings banks within the states which own them.