Few Risks to Kleinwort in Commerzbank Deal

Tom Burroughes Editor London 4 September 2008

Few Risks to Kleinwort in Commerzbank Deal

The sale by German financial conglomerate Allianz of its banking group Dresdner to Commerzbank is highly unlikely to prompt job cuts or dramatic restructuring of Dresdner’s UK private bank, Kleinwort Benson, WealthBriefing understands.

“There is absolutely no reason to believe that there will be any [negative] impact on Kleinwort Benson,” a source familiar with the matter said. “The deal bodes well because Kleinwort Benson is the only [UK] wealth manager that Commerzbank owns. With the Dresdner acquisition, they have acquired a large and significant wealth manager,” the source said.

Commerzbank bought Dresdner from Allianz for €9.8 billion ($14.2 billion) in a deal announced earlier this week. The deal prompted instant media speculation about what could happen to Kleinwort Benson, a bank that traces its history back to the 1780s. Kleinwort Benson has offices in the UK and Channel Islands.

The source pointed out that in its statement about the sale, Allianz said the deal would strengthen Commerzbank’s position in its ability to serve high net worth individuals.

The Allianz statement said:  “The two banks also complement each other in the segment of high net-worth individuals. Dresdner Bank is very strong in this segment. This will help the new bank minimize the gap to the market leader and establish its position as number two in Germany in this market. Dresdner Bank has recently invested heavily in boosting its national and international presence, an asset the new bank will benefit from."

A report on 2 September by Citywire, the news service, said that staff at Kleinwort Benson were “waiting for their new Commerzbank owners to wield the knife on staffing levels” and that staff feared that private banking was too far outside Commerzbank’s strategy to survive. The report also claimed that Commerzbank press staff said they were unaware that Kleinwort Benson existed.

 Contacted by WealthBriefing, a spokeswoman for Commerzbank in Frankfurt declined to talk specifically about its plans for Kleinwort Benson, but added that the bank aimed to “capture the strengths of both firms "[Dresdner and Commerzbank] as a result of the deal.

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