Deutsche Bank chief outlines Postbank takeover plan
The head of Germany's top bank, Deutsche Bank, unveiled on Monday the strategy behind its record capital increase a day after historic new bank regulations were agreed in Basel, Switzerland.
Josef Ackermann told a Frankfurt press conference the bank sought to become "the undisputable leader in Germany's retail banking business and advance to the group of top banks in the European private clients business."
Together, Deutsche Bank and Postbank will have a total of 24 million clients in Germany, he said.
On Sunday, Deutsche Bank said it would raise about 10 billion euros to take over German retail bank Postbank, in which it already owns a stake of nearly 30 percent.
A decision by central bankers and regulators on so-called Basel III rules for banking capital provided clarity to Deutsche Bank's strategy, Ackermann said, while stressing the bank was already on track to meet the new standards.
"We have absolutely no need for further capital in order to comply with the Basel III regulations," the Deutsche Bank boss said.
In Switzerland, a statement by the Bank for International Settlements said Sunday that banks will have to lift reserves substantially under "landmark" new rules drawn up to prevent a repeat of the recent global financial crisis.
The new regulations would force banks to more than triple their current reserves and would be phased in from 2013, the statement said.
Back in Frankfurt, Ackermann outlined Deutsche Bank's plan to consolidate Postbank, which has the biggest retail network in Europe's biggest retail banking market.
Deutsche Bank did not seek to own all of Postbank however, Ackermann said.
"We will pay approximately 6.3 billion euros" (eight billion dollars) he said, and expected to acquire 21 percent of Postbank with an offer of between 24 and 25 euros per share.
Deutsche Bank was taking advantage of a window of opportunity it estimated would save the bank 1.7 billion euros, Ackermann said, and Postbank shares fell sharply in Monday trades on the Frankfurt stock exchange.
Ackermann also acknowledged that the timing of its public takeover offer was not a total coincidence with the announcement of an agreement in Basel, which was widely expected.
"It was good to have this clarity so we can confirm our strategy, that we comply with with the regulatory requirements," Ackermann said.
In response to market speculation that Deutsche Bank wanted to beat other big banks to the capital markets, he said: "We will be the first mover here that is also very important."
Barclays Capital economist Thorsten Polleit told AFP Sunday that "German banks have a particularly pronounced need for fresh equity capital," and other major European banks could also now tap equity markets for fresh funds.
Deutsche Bank estimated that after the capital increase it would have a Tier 1 capital ratio of around 11.6 percent and a core Tier 1 ratio of around eight percent.
They represent the percentage of a bank's core equity to outstanding loans and other assets and provide a measure of a bank's underlying health.
Under the Basel III rules, banks would be required to hold more reserves by January 1, 2015, with the core Tier 1 capital raised to 4.5 percent from 2.0 percent at present.
Deutsche Bank shares gained 1.30 percent to 48.32 euros in midday trading on the Frankfurt stock exchange, while the DAX index of leading shares was 0.97 percent higher overall.
Postbank shares plunged by 6.81 percent meanwhile to 25.20 euros while the MDAX index on which they are listed showed a gain of 0.88 percent.
© 2010 AFP