Deutsche Bank Custody Deal 'Imminent

September 12, 2002 ( - Sources quoted by Reuters predict an "imminent" announcement about the sale of Deutsche Bank AG's securities custody business. The sources predicted the business would go to State Street Corp.

Deutsche has also been shopping its passive asset management operations and US leasing unit, Deutsche Financial Services; the sources say deals are close for those properties as well, Reuters reported, sources that also say Deutsche has stepped up plans to sell its private equity arm.

Deutsche had publicly identified its shortlisted bidders for the custody business, in addition to State Street, as Bank of New York and ABN AMRO Mellon Global Securities, the Reuters report indicated.

Deutsche, Germany’s biggest bank, hopes to raise up to $1.96 billion from the securities custody sale, according to the sources.

A spokesman for the bank declined to comment on the sales processes, which Deutsche announced earlier in the year.

Bank officials have repeatedly said that Deutsche would sell activities that were not part of the bank’s core operations or that were insufficiently profitable, as it cuts costs and focuses on core banking and asset management operations.

Private Equity On the Block

Sources close to Deutsche also said this week that the bank had stepped up its plans to exit the private equity business.

Sources said Deutsche intended to sell all of its direct private equity investments, totaling $3.91 billion. One source said the process would take several months and that the portfolio would likely be broken up and sold to different parties, the Reuters story said.

Sources said the managers of the private equity unit, DB Capital Partners, had also expressed an interest in launching a buyout.

Deutsche will retain its portfolio of indirect private equity investments, or funds of funds, which are worth over two billion euro, the sources said, according to the Reuters report.

The divestments will not affect Deutsche’s real estate private equity business, the Reuters story said.