Deutsche-Dresdner: Whither European Banking?
AFX Europe, Feb 21, 2000, 114 words

Deutsche Bank AG chairman Rolf Breuer said the bank's retail unit Deutsche Bank 24 is not for sale. 

Speaking at a news conference on the bank's e-commerce strategy, Breuer said the unit is looking at a number of tie-ups with outside partners but will not be sold itself. 

The Financial Times Deutschland reported this morning Deutsche Bank 24 may be taken over by Bayerische Hypo- und Vereinsbank AG, which is aiming for leadership in the retail sector. 

Breuer said Deutsche Bank 24 expects to triple its online customer base from 650,000 today to 1.9 mln by 2002. Brokerage 24, the bank's online brokerage unit, is expected to double its customer base to 250,000 later this year from its current level of 125,000 and to show solid growth in coming year. 

Financial Times
Lex: Deutsche/Dresdner
8 Mar 2000 04:20GMT

Germany's big banks make so little money on domestic retail banking that the grass of international and investment banking has always appeared alluringly green. 

Now Deutsche Bank and Dresdner Bank are planning to transfer the retail banking millstone, merged under the name of Bank 24, to the obliging neck of Allianz. 

The insurance company is expected to trade its stakes in Dresdner and Deutsche for a majority stake in Bank 24. That would leave the two partners to get on with the more attractive customer base of large corporates and high net worth individuals. 

The potential advantages are clear. Deutsche's and Dresdner's retail operations combined generate a return on equity of perhaps 5 per cent post tax. That is about a third of what is needed to top up their capital adequacy ratios in line with asset growth. As a result, capital is draining away from the other businesses. Bank 24, spun off and with perhaps 25 per cent cut from a combined cost base of more than E5bn ($4.8bn), might even turn into an adequately profitable institution. At worst, it will be one less problem for the management to worry about. 

As for the new Deutsche, it will look remarkably like UBS, with its focus on wholesale banking and asset management. The resemblance is uncomfortable. It may be too early to judge how well Deutsche's acquisition of Bankers Trust has been integrated. But Deutsche's record does not inspire confidence that it can improve on UBS's spotty post- merger performance. Like UBS, too, it will still have unanswered strategic questions in the US and in its corporate finance advisory services. 

Ian Giddy