Germany’s largest bank is selling off its private customer business in Spain, with Dutch bank ING and France’s Credit Mutuel the likely bidders.
Deutsche Bank is being rolled up by a wave of consolidation in Spain. Picture source: Reuters

Deutsche Bank, Germany’s largest lender, is putting its business with private customers in Spain up for sale as it continues to consolidate its activities, according to financial sources.

Deutsche has about 700,000 clients in Spain, mostly private customers. The sale, estimated to bring somewhere between €550 million and €750 million ($627 million and $855 million), involves 230 branches with 2,600 employees and assets of €15 billion.

The German bank’s activities in Spain are focused on private customer business and asset management. Deutsche’s corporate business and investment banking in Spain, as well as its business in Portugal, are not affected by the sale.

After its successful €8 billion rights offering in the spring, Deutsche doesn’t necessarily need more cash to shore up its capital base. But the Spanish sale is part of the bank’s efforts to consolidate its holdings and streamline its complex corporate structure. Broader consolidation in the Spanish market has also made it more difficult to achieve a profitable market share.

The Dutch bank ING and France’s Credit Mutuel are said to be interested in the Deutsche Bank activities. Both want to build up their business in Spain and had their plans affected by the recent rescue of the ailing Banco Popular by Banco Santander.

The takeover puts ING’s agreement with Banco Popular for free use of the Spanish bank’s 2,300 ATMs by ING customers into question. Also, ING wants to enhance the low-margin lending business by upselling insurance and investment products, which would be easier with Deutsche’s branch network.

Credit Mutuel, for its part, acquired complete control of Banco Targo from Banco Popular and wants to build up a critical mass in Spain.

There is also talk of Deutche getting out of its Polish business, though these plans are not as advanced as those in Spain. Deutsche’s German rival Commerzbank, which has a strong presence in Poland through its MBank subsidiary, is said to be interested in acquiring the Deutsche Bank activities there.

Michael Maisch is the deputy chief of Handelsblatt's finance desk and based in Frankfurt, Germany's financial capital. Sandra Louven is Handelsblatt's Madrid correspondent, covering Spain, Portugal and North Africa. To contact the authors: [email protected], [email protected]