A Chinese magazine reports on a possible joint venture of the bank.
(Photo: dpa)
Frankfurt Deutsche Bank is in talks with the wealth management unit of Postal Savings Bank of China (PSBC) about establishing a joint venture. The aim is to gain access to Chinese private investors, it said in banking circles.
The largest German credit institution is aiming for a majority stake in the new company, reported the financial magazine “Caixin”, citing people familiar with the matter. The talks are still at an early stage and an agreement is not yet imminent, it said. Deutsche Bank did not want to comment on the issue.
The bank and its fund subsidiary DWS, which is also listed on the stock exchange, have repeatedly emphasized in the past that they consider Asia, and especially China, to be an important growth market. In view of the risks in the Chinese real estate market, however, Deutsche Bank is currently less likely to be thinking of lending or real estate transactions and more of the sale of fund products.
The fund company DWS, which has been looking for suitable takeover targets for a long time, could therefore benefit from a joint venture for the sale of financial products. CEO Asoka Wöhrmann makes no secret of his interest in Asia: “China and Asia are undoubtedly among the most attractive markets for asset managers,” he said in an interview with Handelsblatt last June. The People’s Republic is certainly “one of the dominant markets for the DWS of tomorrow”.
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Even then, Wöhrmann had signaled an interest in possible collaborations: “We can imagine anything from sales partnerships to investments and additional acquisitions to larger takeovers. We screen the market very carefully, ”he said at the time.
Deutsche Bank is gradually expanding its business in China
In the past, Deutsche Bank had repeatedly increased its room for maneuver in China. In December, the institute acquired a license that enables Chinese investors to hold fund shares in custody. In the securities business, Deutsche Bank already operates a joint venture with Shanxi Securities, in which the Frankfurt-based company holds 33 percent.
In asset management, the money house works with Harvest Funds Management, one of the largest investment firms in the People’s Republic. Here the participation adds up to 30 percent.
China’s expansion suffered a setback in 2016. At that time, the institute, which was in dire need of capital at the time, sold its minority stake in the Hua Xia Bank, which is active in the private customer business. At this point in time – so we hear – foreign banks were not yet allowed to sell their own products. Since China opened its wealth management market to foreign investors in 2019, large financial institutions have been pushing into this market.
For this reason, a cooperation with a potentially strong sales partner like PSBC would be all the more attractive. The institute, which is listed on the stock exchanges in Hong Kong and Shanghai, has around 40,000 branches and, according to its own information, has around 600 million private customers. PSBC founded a wealth management subsidiary, PSBC Wealth Management, at the end of 2019.
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