Deutsche Bank mulls buying Deutsche Postbank

FRANKFURT: Deutsche Bank AG, confirming market rumors and conjecture, said that it is in what it called advanced talks with Deutsche Post about taking a stake in Postbank, Germany's biggest consumer retail bank.

Germany's biggest bank also said it had signed an agreement with Russia's UFG Asset Management to create a strategic partnership and promote business cooperation in Russia.

In a short statement released late Wednesday, Deutsche Bank, Germany's biggest by assets, ``confirms that it is in advanced discussions with Deutsche Post regarding a potential acquisition of a stake in Postbank. The outcome of these discussions is not yet finalized.''

Deutsche Post, which holds a majority stake of just more than 50 percent, has been shopping Postbank around to potential buyers since earlier this year.

In July, Postbank said that write-downs on investments of euro143 million (US$201.5 million) helped pull its second-quarter results down 21 percent from last year to euro119 million (US$167.7 million) compared with euro151 million a year ago.

So far, Postbank's exposure to such write-downs has been just under euro430 million (US$606 million), far less than bigger rivals who have reported massive losses.

If Deutsche Bank does take a major stake in Postbank, it would be the second such move in Germany's banking sector in weeks.

Last month, insurer Allianz SE agreed to sell Dresdner Bank AG to Commerzbank AG in a euro9.8 billion (US$13.81 billion) deal that will create Germany's biggest bank in terms of customers, propelling it ahead of Deutsche Bank.

However, the combined bank's assets will still fall shy of Frankfurt-based Deutsche Bank's approximately euro2 trillion (US$2.8 trillion) in assets.

Also, Deutsche Bank said Thursday that it signed an agreement with Russia's UFG Asset Management to create a strategic partnership and promote business cooperation in Russia.

Deutsche Bank, through its asset management division will take a 40 percent stake in UFG Invest, the Russian investment management company of UFG AM, with an option to take a 100 percent stake down the road.

Deutsche Bank's existing asset management business in Russia, DWS Investments, will be combined with UFG Invest and the combined businesses will be named Deutsche UFG Capital Management.