Mon, Mar 23, 2015 - Page 15 News List

Deutsche Bank AG planning consumer bank spinoff: report

Bloomberg

Deutsche Bank AG will probably spin off its consumer bank to help it meet capital requirements, Reuters reported, citing people with knowledge of the proposal whom it did not identify.

The German lender’s supervisory board was briefed on three restructuring scenarios proposed by the management board at a meeting on Friday and favors one in which Deutsche Postbank AG and other consumer businesses would be grouped and spun off as a separate public company, Reuters reported on Saturday.

All of the scenarios would have an impact on the consumer bank, and no decision is expected until the end of April, one person cited by Reuters said.

The lender has sought to keep a full-fledged investment bank and consumer-lending unit since Deutsche Bank co-chief executive officers Anshu Jain and Juergen Fitschen took over in 2012, even as rising capital requirements hurt profitability.

The bank is completing a months-long strategic review to determine where it needs to trim operations to boost returns.

A person with knowledge of the discussions told Bloomberg News earlier this month that Deutsche Bank was considering selling Postbank and reducing client offerings at the retail and investment-banking divisions, which might lead to job cuts.

Deutsche Bank shares fell 24 percent last year, the most among the top nine global investment banks. About 7.1 billion euros (US$7.68 billion) of litigation expenses in the past three years have sapped its ability to build capital.

That pushed the bank to sell 8.5 billion euros of new shares last year to meet regulatory capital requirements and fund growth.

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