GERMANY/GLOBAL - Deutsche Bank has hinted it could be looking to sell its global custody and passive asset management businesses.
Announcing its first quarter results for the year, the bank said that it was “exploring strategic alternatives” with regards to a major part of its custody and index-tracking funds units. A spokesman for Deutsche said that the divisions “lacked critical mass”.
The passive asset management business handles EUR187bn in funds under management; it is believed that, combined, the units employ several thousand staff, most of which work for the custody division. The firm declined to give further details on any approaches from interested parties.
Deutsche also said it was looking to “aggressively” pursue its existing restructuring programme under new chairman-elect, Josef Ackermann. The firm aims to accelerate the selling of its remaining industrial holdings - including insurers Allianz and Munich Re - and non-core alternative investments in a bid to release capital for a “potential share buy-back programme”.
The plans also entail refocusing on core competencies which Deutsche identified as Corporate Banking & Securities; Cash Management & Trade Finance; Private & Business Clients; Private Wealth Management; Asset Management, and Corporate Investments.
The firm posted Q1 net income of EUR597m, compared to EUR382m for the corresponding period 2001 - an increase of around 56%. Net revenues were down on last year by EUR0.2bn to EUR1.7bn.
Following the announcement, ratings agency Standard & Poor's placed Germany’s biggest bank on a credit watch placement, reflecting the recent lowering of the rating on one reference entity, in the underlying asset pool, to ‘CC’ from ‘B-’.
By Madhu Kalia
This week's edition of Professional Pensions is out now.
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The Pensions Regulator will consider if schemes should be required to have professional trustees and assess the case for greater regulation of administrators and system providers, PP can reveal.