Deutsche Bank has announced its plan to issue an IPO listing of its DWS Asset Management arm on the London Stock Exchange.
While the exact dates of the sale have yet to be solidified, the bank said that it will list the shares at “the earliest available window.” Current indications show that this will likely take place during the week of March 19.
In addition to the exact date of sale, the total amount up for sale has not been finalized either. However, the expectation is that the bank will list roughly 25% of its DWS shares, in an attempt to raise €1.5 billion to €2 billion ($1.85 billion to $2.47 billion).
Perhaps the biggest benefit of the sale for Deutsche Bank will be the increase of its capital holdings amid recent public concerns over the fiscal conditions and sustainability of the bank.
Deutsche Bank’s Chief Executive John Cryan has been taking the brunt of public unrest toward the German lender, as some have even urged a replacement as early as May of this year. As a result, he is making strong moves to fix the issues that have recently stained the bank’s long-standing name in the financial industry.
Deutsche Bank Clouded with Uncertainty
Deutsche Bank has been at the forefront of financial news headlines in recent years. However, much of the noise surrounding Germany’s largest lender has not been positive and has entailed legal allegations and scandals.
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In September of last year, Deutsche Bank reached a settlement to pay $190 million over its part in a US FX rigging scandal. Similarly, the bank also took a hit earlier this month, when it was ordered to pay $70 million for manipulating USD swap rates. In the latter case, the bank was reportedly intentionally attempting to change benchmark levels to benefit its own existing positions.
Adding fuel to the fire, the approval and implementation of the US Tax Cuts and Jobs Act of 2017, which has impacted global business significantly, strongly contributed to Deutsche Bank recording an annual loss last year.
As a result of the recent turmoil surrounding Deutsche Bank, it is imperative for the bank to begin to restore public confidence and to begin to rebuild its brand in a positive light.
Moreover, it is perhaps even more important for the company to achieve financial profitability and to recapture its rightful place among the top brass of the industry.
Deutsche Bank has recently initiated layoffs, in an effort to cut costs and improve its overall numbers. The layoffs are expected to include between 250 to 500 employees, with the potential to exceed these numbers.
Today’s announcement of a partial IPO of its DWS Asset Management business is another action that the bank is taking to increase its capital base and to restructure its current balance sheet to achieve a more balanced and successful approach to its operations.