Allianz is preparing Dresdner Bank for a break-up and possible sale, a source told Reuters on Friday, a move that could end the marriage of the bank and insurer which many investors wished never happened.
Allianz has hacked away billions of euros in overhead at Dresdner since buying it in 2001 in a 24 billion euro ($37.4 billion) deal a shareholder once described as the biggest disaster in German industrial history. The architects of the take-over deal had hoped to sell bank accounts to Allianz customers as well as car insurance, for example, over the counter at branches.
Instead, Dresdner racked up losses of almost 3 billion euros as cross-selling floundered. It then appeared to turn the corner with modest profits before market ructions pulled it back into the red again in recent months. Now Europe's largest insurer wants to split the business into two - a retail bank and a corporate bank that includes investment banking laggard Dresdner Kleinwort.
Dresdner's supervisory board was due to decide on the move on Friday. This could pave the way for a bank take-over, said the source who had direct knowledge of the matter. Germany's biggest retail bank and Dresdner rival Postbank, is, for example, up for sale.
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