German Deutshce Bank has approved the transaction on the sale of its insurance unit in the UK — insurance companies Abbey Life Assurance — British insurer Phoenix Group for £935 million ($1.2 billion), the Financial Times writes.
Deutsche Bank bought Abbey Life in 2007 from Lloyds Banking Group for £977 million ($1.6 billion). The news of the sale has spurred the growth of Deutsche Bank AG stock, which for more than two consecutive weeks, fell to 26th September fell to a record in the history of the Bank of at least €10,53 per share. 18:13 GMT the stock has risen since the closing level of the previous trading day by 1.58%, to €10.77 per share, while in the middle of the trading day they traded at €of 11.01 per share.
Growth stocks contributed to the growth of the composite index of the largest European companies Stoxx 600, 16:17 GMT it has increased by 0.7% to 342,48 points. The share of Deutsche Bank in the index is only 0.2%, but considering that the U.S. justice Department requires experiencing serious financial difficulties of the Bank compensation of $14 billion in the case on violations in the U.S. mortgage market in the 2000s years, the news about the Bank additional money Positivo impact on the market sentiment, Bloomberg reported. According to the Agency, to the middle of the trading day showed growth of more than 500 companies included in the index calculation.
The German stock index DAX to the middle of the trading day rose by 1.18%, to 10,484.06 points — the index showed growth for the first time in three days. Italian FTSE MIB index for the first time in four days rose 1.08 percent, to 6,308.52 points.
Positive on markets have added comments to the Executive Director Deutsche Bank John Cryan, who expressed satisfaction with the agreement reached with Phoenix and noted that the transaction will strengthen capital of Deutsche Bank, said in an interview with the Agency top Manager of the British investment company Robert W. Baird Patrick Spencer. Due to the deal, the Bank expects to increase capital adequacy ratio, tier 10 b.p. from 10.8% at 30 June.
At the same time, the deal will lead to the expected loss (before tax) of approximately $898,6 due to reputational damage and impairment of intangible assets.
From the beginning, the paper of the Bank fell by more than half against the background of its weak financial performance and prospects to pay a fine of $14 billion, a figure which is just 16% below the Bank’s capitalization (€14.9 billion or $16.7 billion on the German stock exchange).
September 26, shares of Deutsche Bank fell to historic lows after the Bank denied media reports that representatives allegedly asked for help to German Chancellor Angela Merkel. She, in turn, ruled out the possibility of granting Deutsche Bank state aid.
On the morning of 28 September, the German newspaper Die Zeit reported that EU, ECB and the German government is preparing a rescue plan for Deutsche Bank. As told the newspaper’s sources, the plan may include a sale of assets of Deutsche Bank to the extent which will not leave holes in the balance”. Shortly after the appearance of notes, the official representative of the Ministry of Finance Martin Jaeger said that the government of such plans, prepares, and that “cause for speculation no.
Writes the FT, the head of Credit Suisse said Wednesday that the banking sector is in a very fragile position, when the shares of some banks to show significant price movements “against the background of a relatively small number of news.”