Reuters: Regulatory News: Commerzbank puts custodian business on the block - sources

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Commerzbank puts custodian business on the block - sources Oct 22nd 2012, 15:32 FRANKFURT | Mon Oct 22, 2012 11:32am EDT FRANKFURT Oct 22 (Reuters) - Germany's second biggest lender Commerzbank has mandated UBS to help it sell its custodian business, two people familiar with the transaction told Reuters. The unit, which safeguards clients' financial assets, could fetch up to 200 million euros ($261 million), one of the sources said on Monday, adding the goal was to find a buyer in the first quarter of 2013. The Custody unit, which also carries out transactions on behalf of institutional investors and helps them with administrative services, could attract peers including State Street, JP Morgan, Bank of New York Mellon and BNP Paribas, other people familiar with the industry said. Ahead of an investor day on Nov. 8, Commerzbank is looking at ways to make controlled asset sales a potential driver of earnings, people close to the bank had said last. Commerzbank and UBS declined to comment. The bank, which received an 18 billion-euro bailout in the wake of the financial crisis and collapse of Lehman Brothers, has spent years restructuring as Greek debt writedowns and a slowing euro zone economy crimp its efforts to get back on its feet and build capital to meet new European rules. It is still 25 percent owned by the German state. In August, Commerzbank warned of a worsening euro zone crisis and gave a grim profit outlook, saying it may not pay a dividend in 2013. It had already been forced to drop its 2012 profit targets, postpone dividend payments and limit new business to clients in Germany and Poland to meet new capital requirements. After pulling back from shipping finance, commercial real estate and public sector lending, Commerzbank now says it will overhaul its retail branch network as economic pressures mean clients are steering clear of higher margin services. Link this Share this Digg this Email Reprints

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