Deutsche Bank (DB) To Close Brokerage Business In Poland
Zacks Investment Research | Nov 17, 2016 11:15PM ET
As per Reuters, Germany banking giant Deutsche Bank AG (DE:DBKGn) (NYSE:DB) is likely to shut down its brokerage business in Poland, operating as DB Securities S.A. The move is in sync with the bank’s restructuring efforts to fortify its capital position by streamlining operations. In addition, weak performance of Warsaw’s stock market also led to the probable decision.
The domestic stock market has declined nearly 6% in 2016, succeeding a fall of around 20% in 2015. Further, the market turnover decreased to $39 billion in the first 10 months of 2016 versus $225 billion for full-year 2015.
Reuters cited four banking industry sources familiar with the matter. One of the sources noted that the bank might face difficulties during the process as it has to collaborate with the Polish Financial Supervision Authority (KNF). Deutsche Bank has to seek a buyer, which could over take its existing retail clients in Poland.
Further, another source stated that it was Deutsche Bank that initiated price war in brokerage commissions in Poland many years ago, by slashing the commission to nearly half. Also, the source mentioned that the brokerage unit is one of the smaller players in Poland, currently serving nearly 30,000 accounts.
Deutsche Bank has been undertaking several initiatives under its strategy 2020 to improve the overall business performance. Among such initiatives, the company is streamlining its global footprint by offloading unprofitable businesses and shedding non-core assets to free up capital. The bank has been contemplating to sell the whole of Deutsche Bank Polska to ease available capital. (Read more: Zacks Investment Research
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