Commerzbank has decided to sell Dresdner Bank (Switzerland) to Liechtenstein-based LGT Group. The move is expected to be in line with the bank’s reorganisation plans after the last year’s troubled takeover – reported Financial Times.
As part of an agreement with the European Commission, it has agreed to sell Dresdner assets in other European nations also. It is planning to cut Dresdner’s investment banking operations to focus on its domestic market, reported the newspaper.
In January 2009, in the course of the take-over of Dresdner Bank, Commerzbank also acquired a 100% stake in Zuerich-based Dresdner Bank. As of December 31, 2008, Dresdner Bank had 311 employees and the assets under management totalled CHF9.4 billion.
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Analysts are of the opinion that this move will trigger a wave of consolidation in the wealth management industry that is plagued by weak capital base and falling profits. The deal also demonstrates Commerzbank’s intention of confining to its core markets and thereby reduce risks.
LGT has said that the purchase of Dresdner will double its asset base in Switzerland and increase its market share in the Middle East, central and eastern Europe and Latin America.
Prince Max, CEO of LGT, said in the statement: The acquisition will strengthen our foothold in this important financial center considerably. We will not only reinforce and expand our local Swiss onshore business, but also increase our market share in target growth markets such as the Middle East, central and eastern Europe as well as Latin America.
The transaction is subject to the approval of the relevant authorities. It was agreed not to dislose purchase price or further details.