Banking Blues

Fatalism as Postbank Sale Looms – Again

Postbank strike Davids sven darmer
Postbank's employees on strike.
  • Why it matters

    Why it matters

    Deutsche Bank is seeking a change in strategy to remedy recent troubles, and its retail arm is an attractive target. But worried employees will have their say too.

  • Facts

    Facts

    • Deutsche Bank values Postbank, its retail banking subsidiary, at €6 billion, or about $6.42 billion.
    • Postbank emerged from the breakup of the federal post office and was privatized in 1995.
    • Postbank’s pre-tax return of 7.2 percent is higher than Deutsche Bank’s 5.1 percent.
  • Audio

    Audio

  • Pdf

Experienced Postbank executives remember 2008 well. Just before the start of the financial crisis, Germany’s postal service, Deutsche Post, had decided to put its banking subsidiary up for sale.

“Uncertainty spread across the bank like mildew,” recalled one top manager, who declined to be named. “That cannot be allowed to happen again, under any circumstances.”

Back then, things only settled down when it became clear that Postbank’s future was secured. Its new owner became Deutsche Bank, the country’s largest bank.

The calm has been short-lived. Now, less than five years after it was taken over by Germany’s leading financial firm, Postbank chief executive Frank Strauss is once again trying to calm his colleagues. The retail bank is up for sale yet again.

“Please don’t be unsettled by public speculation about our strategy,” he wrote in a recent letter to employees.

But there are good reasons to be unsettled. Deutsche Bank is suffering from a low return on equity, and its stock price also leaves a lot to be desired. The bank is considering a drastic new strategy that will secure its future. Some of the options include selling Postbank, its retail banking arm.

Want to keep reading?

Subscribe now or log in to read our coverage of Europe’s leading economy.