Deutsche Bank (DB) is on the expansion trail again. First the board met this week to discuss plans to use the retail division of Germany's largest bank as a platform for selling mutual and investment funds to the mass affluent in Europe. And yesterday, in a move to expand its European banking activities into France, DB announced that it had signed a letter of intent to acquire the core businesses of the French Banque Worms Group from the financial services group AXA. The negotiations concern the retail and private banking, asset management and corporate banking activities of Banque Worms.
DB's bid to capture Europe's wealthy is a shift in policy since the failed merger with Dresdner Bank earlier this year, under which a minority stake in DB's retail network would have been sold to Allianz. The supervisory board is expected to discuss an idea first put forward in August to create a pan-European retail banking network and online brokerage, but DB said that the board was not likely to make any immediate decisions but it is likely discussions will examine what investment will be needed to roll out a platform for selling mutual and investment funds.
However, hitting the headlines this week is DB's planned purchase of most of Banque Worms, the French bank focused on corporate banking for medium-sized businesses, as well as private banking and asset management. Banque Worms is an ideal acquisition target for DB, given that DB's current strategy is to expand its presence in European asset management. The deal involves Banque Worms’ domestic commercial and private banking assets, which together account for about two-thirds of the bank’s total assets. Banque Worms owns GPW, a fund management company that manages the bank’s mutual funds. DB is understood not to be interested in any of Banque Worms’ international activities, which include operations in the US, Italy, Switzerland, Greece and Sweden.
Jacques-Henri David, head of DB in France commented: 'With the acquisition of Banque Worms' core businesses, Deutsche Bank could accelerate its expansion in the French market and offer services to private and corporate clients from a much broader platform.' DB will acquire a network of 17 branches throughout France and serve approximately 15,000 private clients and more than 2,000 corporate clients. Assets under management held by the involved entities total up to 7.5bn euros.
The acquisition remains subject to exclusive detailed negotiations of the sales and purchase agreement and to approval by the regulatory authorities. The deal could be closed as early as the first quarter 2001.
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