Bank to review strategy and may sell Postbank network
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[December 18, 2014]
By Thomas Atkins
FRANKFURT (Reuters) - Deutsche Bank AG
<DBKGn.DE> will review its strategy and profit targets next year and may
sell its Postbank-branded <DPBGn.DE> retail unit, in a major reversal as
a hoped-for turnaround in profitability slips out of reach.
The bank said on Thursday it would update strategic targets in 2015
as its three-year-old plan came to an end, heralding an overhaul of
the roadmap that aimed to make it Europe's last investment bank with
a global footprint.
The bank's comments come after Manager magazine said Deutsche was
considering a possible Postbank sale. Two people close to the bank's
strategic thinking, who declined to be named, confirmed it was
mulling the sale of the retail network.
Germany's biggest lender said it would be irresponsible to speculate
on the sale of any business and declined further comment.
The magazine said big shareholders including the Qatari royal
family, with 5.8 percent, had expressed displeasure with progress in
the group's turnaround led by co-Chief Executives Anshu Jain and
No-one could be reached for comment at the public relations agency
which deals with matters relating to the Qatar royal family.
Manager said the shareholder disquiet could lead Deutsche to make
changes including the sale of its Postbank division, purchased
between 2008 and 2009. Spain's Banco Santander <SAN.MC> would be an
interested buyer, the magazine said.
Santander declined to comment.
A sale of Postbank, purchased as Europe reeled under the financial
crisis, would represent a major reversal for the bank, which had
sought to diversify its earnings away from volatile investment
Overhauling the groupís profit targets, unveiled in 2012 and diluted
once already in 2014, would also represent a major setback for Jain
and Fitschen, who have had to contend with heavy costs for fines and
settlements for activities.
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The targets have slipped increasingly out of reach, leaving
investors frustrated. They have seen returns diluted by a $12
billion rights issue this year as Deutsche restocked its balance
sheet ahead of European stress tests.
Deutsche's return on equity of less than 3 percent in the first nine
months of this year was well below the 12 percent it aims to reach
in 2016 and a far cry from the 20 percent returns enjoyed before the
Deutscheís investment banking strategy calls for it to vacuum up
activities abandoned by retreating European competitors. But with
interest rates set to remain at record lows for some time in Europe,
the plan has turned into an expensive waiting game for investors.
Shares in the bank, which dropped on Tuesday to a two-month low and
which in October fell to their lowest since 2012, were up 3.3
percent by 1147 GMT versus a 2.1 percent rise in the European sector
But the shares have fallen 23 percent this year compared with a 4
percent fall in the sector.
(Additional reporting by Amena Bakr in Doha; Editing by Arno
Schuetze and David Holmes)
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