Sun, Mar 05, 2017 - Page 16 News List

Deutsche considering capital raise

Bloomberg

Deutsche Bank AG said it is making plans for a possible 8 billion euro (US$8.5 billion) capital raise and several other potential strategic measures, including an initial public offering of a minority stake in its asset management unit.

Other plans under consideration include keeping its Postbank consumer banking unit, the Frankfurt-based company said on Friday in a statement.

Deutsche Bank is now leaning toward reintegrating the consumer banking business, according to people with knowledge of the discussions. No final decision has been made, they said.

It is also studying management changes, including a new role for chief financial officer Marcus Schenck, some of the people said.

The firm is weighing recombining its investment banking and trading divisions, with Schenck gaining some oversight of the business, some of the people said.

Among the options the bank is considering is creating a deputy chief executive officer role, the people said.

The supervisory board is scheduled to meet for two days starting March 16 to discuss potential measures, three people said earlier.

Deutsche Bank has almost doubled in market value since Sept. 26 last year, reflecting relief over its US mortgage securities settlement and the brighter outlook for banks following US President Donald Trump’s election.

Selling Postbank, which employs 18,000, had been a cornerstone of chief executive officer John Cryan’s strategy to boost capital and profitability, but the bank has has been unable to find a buyer.

A majority of the supervisory board favors reintegrating Postbank, accompanied by a capital increase, one person said.

Schenck last month said the lender would only sell Postbank if a deal provided “meaningful capital relief” to Deutsche Bank.

However, labor union Verdi said last month that it opposes reintegrating Postbank into Deutsche because it would put jobs at risk.

Meanwhile, Deutsche Bank could sell as much as 30 percent of the asset management unit in an initial public offering, the people said.

The division had 774 billion euros of client assets at the end of last year.

Deutsche Bank’s asset management had seen six consecutive quarters of net money outflows by the end of last year.

Division head Nicolas Moreau, who joined the business in October last year, has pledged to reverse the trend.

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