Sep 28, 2016
German finance ministry denies government working on Deutsche Bank contingency plan
Deutsche Bank has secured a £935m boost to its balance sheet after signing a long-awaited deal to sell Abbey Life, the British pensions business, to the life insurance consolidator Phoenix.
The German bank, under pressure about its capital strength, said the disposal of the business would add 0.1 percentage points to its closely-watched common equity tier one capital ratio, which was 10.8pc at the end of June. Despite the €1bn cash windfall, Deutsche expects to book a pre-tax loss of €800m on the sale as it must write down goodwill and other intangible assets.
"Deutsche Asset Management will continue to focus on its core businesses of active [investments], passive [investments] and alternatives, while this transaction will also strengthen Deutsche Bank's capital position," said chief executive John Cryan. "We continue to build a simpler and better Deutsche Bank."
Shares in Deutsche Bank gained more than 2pc to €10.78 after the announcement, bouncing from their lowest level in more than a quarter of a century. The stock is more than 50pc below the price it commanded at the start of the year.
By Tara Cunningham, Business Reporter
28 September 2016