Deutsche Bank sets pricing of asset-management IPO

Deutsche Bank AG said the share pricing for the coming partial float of its asset-management unit values the business at $7.4 billion to $8.9 billion, and announced a "cornerstone" investor in the offering, Japan's Nippon Life Insurance Co.

Deutsche Bank said it would sell 20% of the unit, DWS Group, in an offering range of EUR30 to EUR36 a share.

The first day of trading will be March 23 on the Frankfurt Stock Exchange, the German lender said in a statement.

At the upper end of that price range, the business would be valued at roughly the midpoint of recent consensus expectations.

The offering is expected to raise EUR1.2 billion to EUR1.44 billion.

Additinally, Deutsche Bank said it has the option of selling another 5% to outside investors through the share offering, for as much as EUR188 million in additional proceeds.

Nippon Life will acquire a 5% stake in DWS and has agreed to allocate an unspecified amount of assets to the business, distribute Deutsche Bank products, and otherwise help DWS increase its profile in Asia, according to the Deutsche Bank statement.

DWS managed about EUR711 billion in assets as of September.

Deutsche Bank is telling investors it aims to increase that amount annually, a key factor in projections for fees the business can earn.

The lender's executives last month said they wanted the asset-management offering to happen as soon as possible, pending market conditions.

Resilient stock markets have encouraged companies to move quickly to get ahead of any significant market downturn, bankers say.

For Deutsche Bank, the asset-management partial IPO is a central item on a to-do list investors are watching to gauge the lender's progress in a difficult multiyear turnaround under CEOJohn Cryan.

He and his executive team have settled major litigation matters but fallen short of cost-cutting goals and have lost revenue in core businesses.

Mr. Cryan over the weekend said the bank's top executives will forgo a bonus this year for the third consecutive year, following three consecutive full-year losses.

In comments at an event in Austin, Texas, Mr. Cryan said overall employee bonuses for 2017 would be significantly higher than last year.

But he said top executives once again need to take responsibility for a full-year loss. Deutsche Bank had a roughly EUR500 million loss in 2017, including a EUR1.4 billion charge related to the U.S. tax overhaul in December.

Without that charge, Deutsche Bank would have reported around EUR900 million in net income for 2017.

Deutsche Bank's asset-management business is dwarfed in revenue by the lender's deal-advisory, trading and retail-banking businesses, but it is valued for its relatively steady profits.

Last year, the unit posted a pretax profit of EUR725 million on EUR2.5 billion in revenue, most of that from management fees.

DWS is the asset-management business's best-known retail brand, with German roots. Deutsche Bank adopted the name in December for the whole business ahead of the planned IPO.

The brand should contribute to a sense of autonomy for the unit, bankers and others say, as it strives to increase assets and potentially expand through acquisitions.

Deutsche Bank will still own 75% to 80% of DWS's shares, depending on the ultimate offering size.

Write to Jenny Strasburg at


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