Deutsche Bank AG (DB) confirmed Monday that it will list a portion of its asset management division in a move that could raise as much as $2.5 billion for the struggling European lender.
Nearly a year after an €8 billion rights issue that marked a new corporate-wide strategy for embattled CEO John Cryan designed to halt years of losses and a sustained share price slump, Deutsche Bank said it would list the Deutsche Asset Management Unit (DWS) arm on the Frankfurt Stock Exchange "in the earliest available window" and likely use the cash to bolster its balance sheet and regulatory capital position.
"The planned IPO will give us the opportunity to unlock the full potential of DWS for clients and employees, while targeting attractive returns for our shareholders," said DWS CEO Nicolas Moreau. "We look forward to bringing our strong, truly global investment platform and over 60 years of investment experience to the public markets."
No details on timing, price or size of the listing were indicated by Deutsche Bank, but reports has suggested the DWS float could comprise around 25% of its capital and raise between €1.5 billion and €2 billion for Germany's biggest lender.
DWS has around €700 billion in assets under management, the bank said, around three quarters of which are active, and has a 26.3% share of its domestic German market.
Business targets in the medium-term include a dividend payout ratio of between 65% and 75% of net income, net inflows of 3% to 5% of opening assets under management per year, a management fee margin greater than or equal to 30 basis points and an adjusted cost income ration under 65%.
Deutsche Bank shares were marked 0.86% higher in the opening hour of trading in Frankfurt to change hands at €13.42 each, giving the lender a market value of €27.7 billion.
Deutsche Bank, however, has fallen around 15.5% so far this year -- compared to a modest 1.08% gain for the Stoxx Europe Banks subindex -- and more than 30% since it unveiled its capital raising plan on March 2 2017 and said it would sell around €80 billion in legacy assets from its Global Markets division following a $7.2 billion settlement with the U.S. Department of Justice linked to with the bank's mortgage bond activities in the run up to the global financial crisis.
Its problems have been compounded by both a reported leadership spat between CEO John Cryan and chairman Paul Achleitner and a three-year run of annual losses that have shaken investor faith in its ability to turn the bank around.
Earlier this month, Hainan Jiaoguan Holding Co., better known as HNA, cut its stake to 8.8% from a previous holding of 9.9% and fell below the Qatari royal family as Deutsche Bank's biggest investor.