A report in Reuters today has revealed that Deutsche Bank is considering a Luxembourg registration and a partial initial public offering (IPO) of its asset management unit, believed to have a market cap of around €6 billion ($6.4 billion), as part of its strategic revamp, according to sources.
Although discussions are said to be still at an early stage, the move is aimed at freeing up capital, following a record payout for its part in the mis-selling of mortgage-backed securities. Last December, Deutsche Bank to resolve the Department of Justice probe, as reported by Finance Magnates.
At the time, investors had expressed concerns regarding the bank’s ability to withstand such a large amount given that its market capitalisation was around $18 billion, hence such a move is hardly unexpected.
At last week’s World Economic Forum in Davos, Chief Executive John Cryan commented that asset management remained “absolutely core”.
He added: “People forget how big it is and it’s a very lovely steady stream of predictable profits and revenues for us so we like it very much so we’ll keep that”.
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