Deutsche Bank is reportedly discussing a possible bailout or acquisition of Wirecard Bank with regulator BaFin.
Wirecard Bank, the deposit-taking division of the failed Wirecard had €1.9bn in total assets at the end of 2019.
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According to Bloomberg, Deutsche Bank is reviewing the possibility of providing Wirecard Bank AG with financial support.
BaFin confirms that talks over the future of Wirecard Bank are underway. The regulator has sought to ring-fence Wirecard Bank assets, in particular to ensure they are not diverted to other parts of the group. It holds a full German banking licence so can accept deposits and grant loans.
Indeed, Wirecard Bank has grown its deposits by offering market leading interest rates.
Deutsche Bank: mixed M&A track record
Deutsche Bank’s recent M&A track record is distinctly mixed. For example, Deutsche acquired Deutsche Postbank in 2010.
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By GlobalDataAfter a series of U-turns in policy, including a failed attempt to dispose of Postbank, Deutsche has still not fully integrated Postbank into its private banking division.
The combined Deutsche Bank and Deutsche Postbank brands serve 19 million customers from a network of 1,931 branches.
The Deutsche Bank private banking division reported an eye-wateringly high cost-income ratio of around 100% in fiscal 2019.
Deutsche Bank’s acquisition of Sal Oppenheim has also proceeded slowly but has been less problematic. Deutsche saved Sal Oppenheim from collapse in 2010 via an acquisition for €1bn.
Deutsche remains loss-making, attributing a €2.6bn fiscal 2019 pre-tax loss to transformation charges of €1.1bn, goodwill impairments of €1.0bn and restructuring expenses of €805m.
At group level, its cost-income ratio remains around 100% and even if the bank hits its targets, the cost-income ratio will be 70% by 2022.
On a more positive note, Deutsche says it has recognised 70% of the anticipated cumulative costs to achieve its transformation strategy between 2019 and 2022.
