Deutsche Bank Said to Weigh Full Integration of Postbankby
Supervisory board said to mull options for unit on Wednesday
Lender has been looking to sell Postbank unit to raise capital
Deutsche Bank AG is considering a full integration of its Deutsche Postbank unit, potentially scrapping previous plans for a sale of the German consumer unit, according to a person briefed on the matter.
The lender’s supervisory board will discuss options for the unit among other topics at a meeting on Wednesday, the person said, asking not to be identified because the matter is private. A spokesman for Deutsche Bank declined to comment. Reuters reported the deliberations earlier on Tuesday.
Chief Executive Officer John Cryan has sold assets, suspended dividends and eliminated jobs as Deutsche Bank faces mounting legal charges. The CEO told investors in May that he is weighing “creative” solutions to exit the Postbank business, with plans for an initial public offering on hold.
The shares closed at 13.15 euros in Frankfurt, up 1.6 percent on the day. The company has lost about 42 percent of its market value this year.
Postbank could be merged with Deutsche Bank’s other consumer-banking operations under a holding structure to strengthen funding through the unit’s deposits, the person said. Such a plan would also result in the loss of thousands of jobs, according to Reuters.
Deutsche Bank earmarked Postbank for sale last year after German regulators constrained the use of its deposits to fund other businesses at the company and as stricter limits on leverage made mortgage lending less attractive.
A disposal of the unit had been a key part of Cryan’s efforts to raise capital buffers, with Deutsche Bank targeting a sale by 2018. The lender acquired the unit in 2010 as part of former CEO Josef Ackermann’s plan to reduce its dependence on investment banking.
The sale of Postbank would add as much as 100 basis points to the bank’s common equity Tier 1 ratio, according to analysts at Morgan Stanley. Deutsche Bank is targeting a CET1 ratio of at least 12.5 percent at the end of 2018, up from 10.8 percent at the end of June.