Exclusive: Deutsche Bank revamp plan to hit retail hardest - sources

Sat Mar 21, 2015 2:43pm EDT
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By Kathrin Jones

FRANKFURT (Reuters) - Deutsche Bank's (DBKGn.DE: Quote) retail operations will bear the brunt of its planned restructuring and will most likely be spun off in a stock market listing, two sources familiar with internal discussions at Germany's biggest bank said on Saturday.

The bank's supervisory board held a 14-hour meeting in Frankfurt on Friday, spending part of the time reviewing three scenarios proposed by the management board, the sources said.

"The retail banking operations will suffer setbacks regardless of which model," said one source, who declined to be named because he is not authorized to speak to the media.

The supervisory board favors one proposal that would see the bank’s retail operations, including its Postbank DPBGn.DE subsidiary, bundled up and spun off with a separate stock market listing, the source said.

The proposal marks a dramatic shift from Deutsche Bank’s "universal" strategy that sees it sell everything from derivatives in Tokyo to mortgages in Munich.

Rising capital demands from regulators have made the universal model too unwieldy and shedding the retail operations would help the bank to trim its balance sheet and meet capital requirements more easily, the source said.

Dumping retail would transform Deutsche into an investment and merchant bank aimed at companies, capital markets and investors, similar to Goldman Sachs. It would represent a reversal by a group that took pains to broaden its earnings beyond volatile business such as investment banking.

No decisions have been taken and are not expected to be finalised until the end of April, the source said.   Continued...

The headquarters of Deutsche Bank are pictured in Frankfurt January 29, 2015. REUTERS/Ralph Orlowski