Deutsche Bank AG on Tuesday signaled that it might sell large parts of its asset management division, saying the activities are under review as changes in the regulatory as well as competitive landscape and associated costs are affecting the business and growth prospects.
Deutsche Bank's asset management division is split into the four business lines: DWS; the infrastructure funds RREEF; Deutsche Insurance Asset Management; and DB Advisor, which is made up of the institutional investors' advising activities.
"All strategic options are being considered," Germany's largest bank said, adding that it isn't including the retail fund manager DWS' German, European and Asian units in the strategic review. DWS' American unit, however, is part of the review.
Kevin Parker, global head of asset management and a member of the Deutsche Bank Group executive committee, said the "aim is to find the best strategic option to maximize the performance and potential of the asset management division."
Analyst Michael Rohr of Silvia Quandt Research said that the units under review are "hardly profitable," which he thinks is the main reason for the review. "RREEF [infrastructure funds] frequently suffered from writeoffs, and Deutsche's insurance asset management is a low-margin business," he said.
The total invested assets of the unit stood at $697 billion at the end of September. Deutsche Bank, like other European banks, is looking to cut costs and raise capital levels in preparation for tougher regulatory requirements.