DB Custody Suitors Emerge

August 20, 2002 (PLANSPONSOR.com) - Three US banks have emerged as bidders for Deutsche Bank's custody business, put out on the block earlier this year as part of a cost cutting plan, according to published reports.

As reported here last month, the sale of the bank’s $4.2 trillion custody business has been rumored for some time.  However, recent comments by Deutsche Bank AG’s Chief Executive Josef Ackermann have ramped up speculation on the transaction.

Most recently in reviewing second quarter results, Ackermann told reporters that sales of “non-core” operations “will be started this year but the closing of some sales may happen next year.”  Among non-core operations, Deutsche Bank named insurance, global securities services, passive asset management, North American asset finance, and French banking activities. 

The sale of the world’ fifth largest custodian business might generate between one and two billion euros at most, according to Reuters, citing analysts.

The suitors are said to be:

  • State Street
  • Bank of New York
  • ABN AMRO Mellon Global Securities.

The planned sale comes as Ackermann implements his restructuring strategy of focusing on eight core businesses and giving up securities services and passive asset management, asset finance, insurance and French private banking, the Reuters report said.

That would allow Deutsche Bank to focus on the businesses it has defined as “core”, including:

  • global markets
  • global equities
  • corporate finance
  • transaction banking
  • asset management
  • private wealth management
  • private and business clients
  • corporate investments.

Deutsche, Germany’s biggest bank, plans to slash operating costs with the help of 14,500 job cuts as it — like its rivals — struggles to ride out the toughest conditions in the German banking market for decades.