Deutsche Bank leans toward limited revamp with Postbank sale: sources

Sat Apr 18, 2015 8:57am EDT
 
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By Kathrin Jones

FRANKFURT (Reuters) - Deutsche Bank (DBKGn.DE: Quote) will sell Postbank DPBGn.DE but keep a pared back own-brand retail business in the overhaul plan currently favored by management, sources familiar with the internal discussions at Germany's biggest lender said.

Only two management board members support dumping all retail activities, with the other six favoring just selling Postbank, the sources told Reuters, speaking on condition of anonymity as the matter is not public. The bank will decide on the hotly-debated overhaul as soon as next week, they added.

Seven years after the financial crisis started, Deutsche is looking to overhaul its business after falling far short of its return-on-equity targets and suffering a string of regulatory fines and legal challenges.

The choice to keep most retail operations and offload only Postbank, which Deutsche bought in steps for about 6 billion euros ($6.5 billion) starting in 2008, is a concession to credit rating agencies concerned a complete retail exit would raise Deutsche’s risk profile and cost of funding, the sources said.

It’s also a nod to concerns in Berlin that a total retail exit would see the country’s flagship bank lose touch with its home market, the sources said. Deutsche's own-brand retail chain serves some 8.5 million Germans through around 730 branches.

By selling Postbank, Deutsche aims to raise capital and retreat from the low-profit battlefield that is German retail banking, dominated by savings and cooperative banks.

NOBODY SPARED   Continued...

 
The logo of Germany's largest business bank, Deutsche Bank, is seen at the bank's headquarters behind twigs in Frankfurt January 31, 2012. REUTERS/Kai Pfaffenbach