Strategy

Deutsche Bank Offers No Comment On Prospect Of Asset Management Unit IPO

Josh O'Neill, Assistant Editor, 26 January 2017

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Amid speculation that Germany's biggest bank is considering listing its asset management arm through an initial public offering, a spokesperson would not offer any comment on the matter.

Deutsche Bank remained tight-lipped when contacted by WealthBriefing over media reports that it is considering a partial initial public offering of its asset management arm amid an overhaul following its $7.2 billion payout to the US government. 

Deliberations are still in their infancy and no decisions have been made, an anonymous source reportedly told Reuters, adding that prior to such a move, the division would look to have its main registration transferred to Luxembourg due to tax and regulatory advantages offered by the country.

A spokesperson for the bank declined to comment. 

Germany's largest lender last week finalised a record $7.2 billion US settlement over its sale of toxic mortgage-backed securities in the run-up to the 2008 financial crisis. Due to the backlash over the hefty penalty, Deutsche Bank is expected to give a strategy update to investors in spring.

The Frankfurt-headquartered bank's asset management arm posted a 7 per cent rise in pre-tax profit to €549 million ($590.7 million) in the first nine months of 2016. Assets under management at the unit were €715 billion as of September last year. According to analysts cited by Reuters, the business could be valued at €8 billion in a potential IPO.

Last week, Deustche Bank moved to curtail bonus payments to its staff in a bid to drive profits and soften the blow dealt by the US Department of Justice's fine, a signal that the firm is seeking to improve margins by cutting business costs wherever it can. 

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