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 agreed to a $7.2 billion deal to resolve the Department of Justice probe, as reported by Finance Magnates.
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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”.