Deutsche Bank rethinks India sale
Deutsche Bank called off talks to sell its retail and private-wealth businesses in India to IndusInd Bank, people with knowledge of the matter said.
Deutsche Bank called off talks to sell its retail and private wealth businesses in India to IndusInd Bank, people with knowledge of the matter said.
The sale was a project initiated under former CEO John Cryan, and Deutsche Bank was reconsidering the deal following his departure earlier in April, the people said, asking not to be identified because the information is private. The two businesses have about 300-billion rupees ($4.6bn) in assets, according to one of the people.
The bank’s new CEO, Christian Sewing, and retail head Frank Strauss decided that Deutsche Bank did not get a price that justified selling the profitable units, the people said. The German lender had instead decided to keep the assets and was now considering increasing its investment in India, several people said.
“Assuming the unit is profitable, it makes sense for Deutsche Bank to keep it and maintain its presence in Asia,” Andreas Plaesier, an analyst at MM Warburg, said. “Sewing was probably already planning to stop the sale when he was appointed CEO and it’s therefore unlikely to affect his target” of keeping adjusted costs below €23bn in 2018, he said.
In a statement when he was appointed, Sewing said that Deutsche Bank must regain its “hunger for business” to achieve its revenue targets in 2018.
The leadership change has prompted scrutiny from S&P Global Ratings, which said it might downgrade the bank’s credit rating if it was affected by a “prolonged, deepened or costly restructuring”.