Germany’s biggest bank, Deutsche Bank AG, is reportedly contemplating selling its brokerage arm in Poland, operating as DB Securities S.A, due to weak performance of the nation’s stock market and as the banking giant is streamlining its operations to boost capital position. The news was reported by Reuters, citing four banking industry sources familiar with the matter.
The report stated that Deutsche Bank might face difficulty as it must coordinate the process with the Polish Financial Supervision Authority (KNF), since it has to seek a buyer to acquire its clients book.
Filling the Gap Between Brokers, LPs, and ClientsGo to article >>
As part of chief executive John Cryan’s overhaul of the group, Deutsche Bank has announced several initiatives to revamp its global footprint through shedding non-core assets and unprofitable businesses. It has entered into agreements to sell a string of its smaller overseas operations in a bid to boost capital and to simplify the bank’s business model.
The potential sale of DB Securities also comes amid poor performance for the domestic stock market which dropped 6 percent in 2016, after an almost 20 percent loss in 2015. In addition, the equities turnover went down to $39 billion YTD relative to $55 billion in the year earlier.
Deutsche Bank is not the only foreign entity mulling an exit from Poland. Should the sale go ahead the German lender would join Austria’s Raiffeisen and Italy’s UniCredit banks which sold their local units amid efforts by the Polish government to get hold of a larger stake in the nation’s banking sector and reduce foreign ownership.