Phoenix CEO Interested in Deutsche Bank's Abbey Life Businessby
Bannister says hasn't spoken yet with German lender on Abbey
Company has capacity to entertain `large' acquisitions
Phoenix Group Holdings Chief Executive Officer Clive Bannister said he’s ready to do deals and would be interested in Abbey Life if Deutsche Bank AG puts the U.K. insurance business up for sale.
Bannister, who has spent the last four years cleaning up Phoenix’s balance sheet, said he has not yet spoken with Germany’s largest bank about a possible deal.
“I don’t know what their plans are but when they do become clear, of course we would be interested in talking with them,” Bannister said in a telephone interview. Phoenix has the funding capacity “to entertain large deals.”
Deutsche Bank is waiting to hear from the European Central Bank on how much capital lenders will be forced to hold against their insurance assets before it decides whether to sell Abbey Life, people familiar with the discussions said this month. The unit, which helps pension funds to protect against its members living longer than expected, could fetch as much as 3 million pounds ($4.6 billion), one person said.
Bannister said he expects that other banks and insurers who own similar life insurance businesses will look to sell once European capital regulations, known as Solvency II, are implemented in January. That follows Cinven’s decision last month to sell Guardian to Swiss Re AG’s Admin Re unit for 1.6 billion pounds. Phoenix had also been interested in buying Guardian.
“It’s about looking for businesses that are accretive for shareholders,” said the CEO. “There is a lot of closed life businesses out there and we think vendors will be motivated” to look at their options.
Phoenix generated 18 million pounds of cash in October, boosting the total this year to 155 million pounds, the company reported Thursday. The shares were down 0.2 percent to 824 pence by 11:32 a.m. in London.