Deutsche Bank’s asset management operations earned pretax profit of EUR117 million in the third quarter of 2011, mainly driven by the bank’s wealth management business.

It is estimated that the sale of Deutsche Bank’s asset management business could bring as much as EUR4.5 billion in fresh capital for the German bank.

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According to analysts, Deutsche Bank is one of the least well-capitalized banks in Europe. Under as the new Basel III guidelines, the bank is conducting a strategic review of the division due to regulatory changes and associated costs.

Analysts estimate the bank could face a capital shortfall of between EUR10 billion and EUR15 billion as the Basel III requirements are phased in over the next few years.

Deutsche Bank said that review would take into account its institutional investor business, DB Advisers; its alternative asset business RREEF; an insurance asset management business; and its DWS Investments mutual fund business in the Americas.

However, the review will not include the bank’s private wealth management business, part of the bank’s private clients and asset management division.

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The division currently has US$690.19 billion in assets under management, which pales in comparison with the US$3.3 trillion managed by sector leader BlackRock as of 30 September 2011.

WealthInsight is of the opinion that the sale of the asset management division is a prudent decision, as the division has not been a major money-maker for the bank in recent years and now lacks the scale necessary to compete effectively and efficiently with its biggest rivals.

WealthInsight expects Deutsche Bank to shift its focus primarily towards its Wealth management business, the path also chosen by its major European rivals such as UBS and Credit Suisse, as the wealth management business has relatively lower operating costs and requires a smaller capital base.