Berlin's biggest bank, Landesbank Berlin (LBB) is gearing up to offload its structured products desk to Frankfurt-based DekaBank once it completes its restructuring plan which includes changing its current name to Berliner Sparkasse, which was decided yesterday by the bank's board of directors.
A source at the bank's structured products desk confirmed that LBB is in talks with DekaBank to sell its structured products business, although the structured products desk will continue to operate under LBB after the name change
"Once the contracts have been exchanged, the structured products desk will be transferred to DekaBank," said the source.
The decision to transfer the structured products desk to DekaBank is part of LBB's strategic plan which includes the completion of negotiations with DekaBank for the sale of its customer-oriented capital market business, as well as LBB Invest (the investment arm of LBB) joining forces with the central securities and savings house at DekaBank.
"We want a large savings bank which focuses entirely on private and corporate customers and commercial real estate financing, as well as selected regional savings bank services," said Georg Fahrenschon, chair of the supervisory board at LBB and president of the German Savings Banks and Giro Association, DSGV.
LBB has developed a robust business in recent years despite the financial crisis but began a strategic review of its operations to comply with tougher regulatory requirements for banks, and the need to buffer its businesses with increased capital.
DekaBank declined to comment.