DEUTSCHE Bank has clinched its takeover of Deutsche Postbank after securing a 21.48 per cent stake in the Bonn-based lender today.
Deutsche Bank said it would consolidate Postbank by the end of the yer after securing the stake in Germany's largest retail bank on top of its existing 30 per cent holding.
The deal is a milestone for Germany's flagship lender as it seeks to diversify its refinancing base amid new liquidity and capital rules.
Deutsche Bank, which depends on investment banking for more than 80 per cent of profits, will add stable earnings from Bonn-based Postbank, which has 14 million clients.
Including the costs of acquiring its initial 30 per cent stake, buying all of Postbank would cost €6.3bn (£5.3bn), Deutsche said.
The deal also adds a stable funding source and helps Deutsche issue more pfandbriefs, or German covered bonds.
The importance of refinancing became clear during the financial crisis when Lehman Brothers, Hypo Real Estate and IKB ran aground in large part due to refinancing and liquidity problems.
Deutsche Bank's shares traded 2.8 per cent lower at €37.825 at 1205 GMT, while Postbank shares slipped 0.2 percent.
Deutsche said enough Postbank shareholders had accepted the €25 (£21.10) a share offer – the legal minimum – to hand it majority control.
It will gain 1,100 branch offices to total around 2,900 in Germany alone from the addition of Postbank.
Deutsche Bank has said combined operations will yield €250m in revenue synergies and about €710m in cost synergies.
Earlier this year, Deutsche issued €10.2bn worth of shares to stock up its Postbank holding, which was just under 30 per cent in September.
Deutsche staggered its takeover of Postbank to await the impact of Basel III capital rules, buying an initial stake of almost 30 per cent in September 2008 as a way to gain access to Postbank's 14 million clients.
City A.M. Reporter