Another Small Meal For Deutsche Bank – US-FOREX.US
Germany’s Deutsche Bank likes nibbling rather than swallowing. It announced on Wednesday a potential “strategic partnership” with venerable 220-year-old Luxembourg-based private bank Sal. Oppenheim, but sources close to the talks say Deutsche is only interested in taking a minority stake-”anything between zero to 49%.” Nor is this the first time: Six months ago, Deutsche Bank bought a 25% stake in retail bank Deutsche Postbank, with the option to buy the rest in three years time.Is there a pattern developing? Merck Finck analyst Konrad Becker thinks so. He says that Deutsche Bank
has enough cash to swallow Sal. Oppenheim whole, which he estimates would cost around 2 billion euros , without the need to raise capital. But Deutsche Bank is unlikely to want to threaten its Tier 1 capital ratio-currently at 11%-by buying another company, especially with stricter capital requirements under the new Basel II international banking regime.That was the logic behind Deutsche Bank’s deal with Postbank, which is essentially a three-tier acquisition proposal. Deutsche has promised to acquire a further 27.4% of Postbank in 2012, via a convertible bond, and will also decide whether to exercise options for the remaining 47.6%. It wasn’t all Deutsche’s idea, as the original agreement did not include the mandatory convertible bond, but it seems to be working out. A spokesman for Deutsche Bank refused to comment on whether the acquisition strategy might be repeated, but one source close to the talks said: “It worked for Postbank. It might work for Sal. Oppenheim.”Shares of Deutsche Bank rose 0.6%, or 28 euro cents , to 46.64 euros , during afternoon trading in Frankfurt. The lender spooked investors with its second-quarter results last month, which showed a bigger-than-expected 1.4 billion in provisions for risky loans. Then again, perhaps it’s logical that Deutsche Bank is not interested in acquiring Sal. Oppenheim outright. The private bank reported a loss of 117 million euros last year, and there’s no telling what troubles may lurk in its accounts. WestLB analyst Georg Kanders says Deutsche’s main aim is keeping out other potential buyers like Credit Suisse
, which would likely have no problem with swallowing Sal. Oppenheim whole.