Public Intelligence

By Jonathan Gould, Edward Taylor and Philipp Halstrick
Reuters
August 5, 2009

FRANKFURT- Deutsche Bank has made a non-binding offer to take a capital stake in private bank Sal. Oppenheim, Germany’s biggest bank said on Wednesday.

A financial source familiar with the talks said Deutsche was considering a stake below 50 percent in Sal. Oppenheim, which is active in both investment banking and wealth management but which recorded a 117 million euro ($168.4 million) net loss in 2008, its first loss since the World War Two.

The deal would not entail any structural changes at either bank, the source said.

Further details on the size and structure of the move were not immediately available.

“The strategic partnership is intended to give Sal. Oppenheim’s customers access to Deutsche Bank’s global network and strengthen Deutsche Bank’s position in business with affluent private clients in Germany,” Deutsche Bank said in a statement.

Deutsche Bank declined further comment while Luxembourg-based Sal. Oppenheim was not immediately available.

The deal comes after Sal. Oppenheim had denied for weeks that it may need extra capital to stay afloat. Securing an investor may help Sal. Oppenheim, banker to Germany’s wealthiest families, avoid an exodus of client money similar to the one seen at Swiss bank UBS AG.

Sal. Oppenheim made a number of high-profile investments that buckled in the financial crisis, such as subprime casualty IKB and department store group Arcandor, which became Germany’s largest post-war insolvency.

The bank’s owners, who include Matthias Graf von Krockow, signalled that should the situation deteriorate or the bank be required to set aside more capital, its owners would step in — they have already bankrolled one capital hike.

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