Deutsche Bank agrees sale of BHF Bank to RHJ International

Analysts have said the announced disposal by Deutsche Bank of private bank BHF Bank is “good news”, but cautioned the impact of the sale on its risk weighted asset position will be “minor”.

The offloading to Kleinwort Benson Group, a wholly-owned subsidiary of financial services group RHJ International, for €384m cash, will account for just 5% of the reduction in risk weighted assets Germany’s largest bank hoped to make by March next year, calculated analysts at Natixis.

The sale of the €36bn private banking group generates a capital loss of €116m for Deutsche, but liberates €4bn of its risk weighted assets.

“This is good news for Deutsche Bank, which had previously been rather unlucky in its attempts to sell off assets,” Natixis analysts said.

Leonhard Fischer, chief executive officer of Kleinwort Benson Group and RHJ International, said: “BHF-BANK is an attractive business to us, with significant positions across its core businesses, a rich heritage and a strong balance sheet.

“With their client focus on entrepreneurs, corporates and wealth creators, and strong prospects in their domestic markets, Kleinwort Benson Group and BHF-BANK are also strategically well-aligned.”

Henry Ritchotte, chief operating officer of Deutsche Bank, said: “For the new, stronger BHF-BANK, this can open up sustainable, long-term prospects.”

Deutsche Bank has negotiated with RJH for over a year to sell the BHF unit, which it inherited in 2010.

Deutsche has concluded the process, begun in November 2011, of reviewing non-core asset management operations – notably except DWS Investments – to sell.

Its attempt to sell RREEF to Guggenheim Partners ended by mutual consent in June when the two parties found they could agree on terms.

Natixis noted the BHF deal awaits regulatory approval, and “this is by no means a trivial matter”, as an initial planned disposal, to LGT, was blocked by the watchdog in April 2011, owing to a “lack of transparency surrounding the funds financing the acquisition.

“Bafin had then delayed the operation with RJH since it had reservations about the terms involved in financing the acquisition,” Natixis said.

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