By Steven Arons, Katherine Griffiths and Dinesh Nair
Deutsche Bank AG is monitoring the situation at Credit Suisse Group AG for a potential opening to acquire certain businesses, according to people familiar with the matter.
Discussions have touched on what parts of Credit Suisse would be attractive and what valuation they’d put on desirable assets should they come to market if it’s acquired by UBS Group AG or broken up, the people said, asking not to be identified discussing private information. The German bank’s deliberations so far are internal and it hasn’t made any concrete proposals to the Swiss lender yet, the people said.
Deutsche Bank’s deliberations are part of a larger exercise to assess potential fallout from the Credit Suisse rout, the people said. Larger rival UBS is exploring an acquisition of all or parts of Credit Suisse at the urging of Swiss regulators and any combination could lead to asset sales, people familiar with the matter have previously said.
A Deutsche Bank representative declined to comment.
Credit Suisse’s asset management and wealth businesses could be of interest, given the German firm’s appetite to expand in those areas. It had already studied those businesses while the Swiss bank was preparing a major strategy revamp it presented in late October, Bloomberg has reported. The project had been on hold since the Swiss lender announced the overhaul, though people familiar said recently that it could be reactivated if assets became available.
Deutsche Bank Chief Executive Officer Christian Sewing has previously said that the firm wants to play a lead role in consolidation — once it eventually happens — after breaking off talks on a potential deal to take over German rival Commerzbank AG. He indicated that the bank should have its “own house in order” by the end of 2022, though as recently as this week said he had little immediate appetite for M&A.
Credit Suisse is struggling to draw a line under a deep crisis of confidence that forced it to seek emergency liquidity from the Swiss National Bank earlier this week. The lifeline calmed investors only for a short period, and Swiss regulators subsequently asked UBS to explore taking over of all or parts of its rival, Bloomberg has reported.
JPMorgan analysts led by Kian Abouhossein in February put an estimated valuation of 10 billion Swiss francs on Credit Suisse’s wealth management unit and 1.4 billion francs on asset management.
Since taking charge five years ago, Deutsche Bank Chief Executive Officer Christian Sewing has held official takeover talks with Commerzbank AG and informal ones with UBS, though all discussions were ultimately broken off without a deal. He’s been a forceful advocate for European banking consolidation and said he’d want to be buyer rather than a target in any potential deal.