Deutsche Bank may scrap planned Postbank spinoff -source
Reuters July 21, 2016 (Changes sourcing, adds investor, analyst quote)
FRANKFURT, July 21 (Reuters) - Deutsche Bank may abandon plans to spin off its retail unit Postbank given a weak IPO market and the absence of a good offer from a prospective buyer, a source close to the matter said on Thursday.
Germany's largest bank announced last year that it wanted to sell Postbank, mainly to free up regulatory capital, but Chief Executive John Cryan acknowledged in May that a flotation would be challenging in the current capital market environment, which has seen hardly any listings in Germany this year.
The source said the bank now sees only a slim chance of floating Postbank by the end of next year and does not see any signs of a good offer from a potential buyer.
German business monthly Manager Magazin first reported on Thursday that the sale may be off.
Deutsche Bank, in a statement, declined to comment on its plans for Postbank.
The bank also denied a report by Manager Magazin in its story on Thursday that the lender planned to split in two, with one business focused on capital markets and the other on retail and corporate clients, in a plan internally dubbed 'Project Jade'.
The bank said in a statement that 'Project Jade' was not about splitting up Deutsche Bank, but has been a long-running project aiming to simplify its structure.
A top 10 Deutsche Bank investor, who did not wish to be identified, said it would not object to the lender keeping Postbank, which has 149 billion euros in assets and contributed a solid profit to Deutsche Bank's otherwise dismal 2015 results.
However, without the money raised from a sale, the bank would need to apply deep cost cuts elsewhere to meet an expected regulatory requirement of holding capital reserves worth 4 percent of its balance sheet.
As of March, the bank's leverage ratio had decreased to 3.4 percent.
"To survive in the long term, Deutsche Bank will have to massively cut its investment banking activities," said Dieter Hein, analyst at Fairesearch-Alphavalue.
Sources told Reuters in February Deutsche Bank would cut the book value of Postbank to 2.8 billion euros ($3 bln) because the then book value of 4.5 billion euros was seen as unachievable in either an initial public offering or a sale.
Cryan said in May that the bank was either hoping for a market recovery or looking for "a slightly more creative way" to dispose of Postbank.
When the decision to spin off Postbank was taken, Deutsche Bank's supervisory board opted against an alternative plan of splitting the bank into a retail banking unit - which would have included both Postbank and its own-brand retail chain - and a pure investment and commercial bank.
This so-called "big solution" was, at the time, thrown out because of the expected technical difficulties of executing such a move and concerns that a complete exit fr
it seems today - but there is a small puff of wind evident - would have been good if the ticker had kept working after 10.30 am, when it seems to have stopped working.
We have indeed a long way to go yet but very glad to hear that Ireland is busy - booming is a bit strong - although I was told yesterday, by a neighbour just returned from Florida, that it was full of Irish people ON HOLIDAY - good luck to them. I am sure their holidays are well deserved and have been hard earned.
It was good to read that one of the cotton mills has been restored and is now working with NEW equipment. When I was in Lancashire in the late sixty's they were being closed wholesale and all the machinery sold to India and Pakistan as it was then.
I remember the fuss that was caused in Sheffield when Steel Peech & Tozer's 14" Mill was sold to Hindustan Steel along with a team of rollers, who were to instruct the new owners on how to use it. We probably know their successors as TATA now.
Good also to see that "Free Speach" still survives at least on this board.
.. july 29.. next week friday.. results should be positive.. asset quality improving.. net interest margin improving... lower write offs.. . expenses watched closely.. interest income inline with projections..
i don't think this is a dead cat bounce, i think this is the real deal. next week they'll announce that since shares have gone back up, the hole in the pension fund isn't as big as when they first announced it and so they is possibility of half cent dividend next year even a cent. With 32 billion shares out, each cent dividend is only 323 million which i think they can definitely afford. that's 5% on today's price. Mid 20's by September I think.
Exactly Trump is offensive and controversial to me but not to others. What is he accountable for that's his opinion you have yours?
I can see why someone growing up in Iraq would hate westerners because Blair and Bush destroyed their country. Do I agree with their ideology NO but I can understand it.Same way with the Catholics in NI back in the day not too long ago it was no Catholics need apply.(wrong side of the tracks btw) How do you fight against oppression? Some people do it thru the political route SDLP some by more unconventional means IRA.
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