Deutsche Bank is reported to consider floating its asset management unit, in a bid to boost its cash ratio, amid a multi-billion-dollar charge by the US government over alleged misselling of mortgage-backed securities.
As the Financial Times reports, Deutsche is planning to prepare a public listing of its asset management division, however, an IPO would only take place following the completion of the settlement with US authorities. Deutsche Bank declined to comment on the report.
As of June 2016, Deutsche Asset Management covered €710bn of assets under management and according to its latest annual report, it is one of the strongest performing units, with pre-tax profits increasing by 23%, compared to a struggling investment banking division.
The group has faced a plummet in its share prices following an announcement by US regulators that it faces a $14bn (€12.57bn) fine due to alledgedly misspelling mortgage backed securities. As a result of falling share prices, Deutsche’s market value has halved sicne the beginning of this year.
Other options being speculated for the German lender are an outright sale of its asset management division, an option which has been explicitly denied by Deutsche Bank CEO John Cyran, or to increase the number of shares in circulation, however, the latter is unlikely to be sufficient in covering the scale of litigation charges.
For Funds Society, Madrid
For Fórmate a Fondo