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German Banks To Merge Private Banking Businesses, Plan Regional Expansion
Germany's DZ Bank and WGZ Bank are pulling together their private banking businesses in a new Luxembourg-based venture from 2011, in a bid to further expand and strengthen their wealth management operations in Germany.
The new enterprise, which apart from private banking also includes supplementary business segments such as fund services and foreign currency lending, will assume the name of the existing DZ Privatbank, the firms said in a joint statement.
As reported yesterday, DZ Privatbank, which is based in Luxembourg, is also in the process of acquiring parts of the private banking arm of UniCredit Luxembourg,
In the latest statement from DZ Bank and WGZ Bank, it said that as yet, the boards of both banks have signed a corresponding letter of intent, which indicates that the new business is to be created by merging the Luxembourg-based units of DZ Bank, WGZ Bank and DZ Privatbank (Schweiz).
The new business will operate in the private banking segment as a partner of the local banks under the cooperative flagship brand VR-PrivateBanking and in accordance with the principle of decentralisation (for instance, it will support the local cooperative banks in their private banking activities).
The future management of the new unit will be made up of managers from each of the two banks, including Dr Stefan Schwab as chief executive as well as Dr Bernhard Früh and Andreas Neugebauer as his deputies.
The merger should be completed by mid-2011, bringing assets under management of the integrated businesses to around €12 billion (about $15.6 billion) and total assets to around €17 billion.
"By merging their private banking activities, DZ BANK and WGZ BANK jointly with the local cooperative banks will further improve the opportunities in this business segment for the Cooperative Financial Services Network as a whole," said Werner Böhnke, CEO at WGZ Bank.
"We are thus creating ideal prerequisites for the further expansion our already good position in the German private banking market and for jointly and successfully furthering our private banking market initiative," added Wolfgang Kirsch, CEO at DZ Bank.
