Deutsche Bank gains in Frankfurt trading

Bloomberg

Deutsche Bank AG extended gains in Frankfurt trading on a report Germany’s largest bank considered the sale of all or part of its asset management business as it explores strategic options to revive profit.
While small parts of the asset management division could be sold, executives at the bank are keen to hold on to most of the business, the Wall Street Journal reported, citing unidentified people familiar with the discussions. Senior managers are meeting this weekend to discuss Deutsche Bank’s options and may adjust financial targets set in October, according to the report.
Chief Executive Officer John Cryan is considering fresh measures less than a year into his strategic overhaul as volatile markets and negative interest rates continue to squeeze profit. While executives also explored a possible merger with the biggest German competitor, Commerzbank AG, the banks abandoned the idea for now as they focus on their own restructuring plans, a person familiar has said.
The shares climbed as much as 4.3 percent, and were up 3.8 percent at 13.71 euros as of 1:37 p.m., paring this year’s decline to 39 percent. The merger talk also continued to buoy Commerzbank shares on Thursday, with the stock rising as much as 6.1 percent. That’s the biggest intraday gain since July 8. A spokesman for Deutsche Bank in Frankfurt declined to comment on the WSJ report.
Cryan is eliminating thousands of jobs and selling assets to boost profitability, hurt by charges tied to past misconduct and a slump in trading revenue. The CEO has already called 2016 a “peak restructuring year” and said Deutsche Bank may fail to be profitable.
As part of his overhaul, Cryan is targeting costs equivalent to about 65 percent of revenue by 2020. That compares with 87 percent in 2014.
Some of Europe’s largest banks have scrapped profitability targets and deepened cost cuts to help shore up earnings, undermined by volatile markets and negative interest rates.