High hopes rest on German Postbank delivering
For a plain post office bank, Germany’s Postbank carries a great weight of expectation. Markets are looking to June’s planned {XEU}3bn flotation of up to 49 per cent of the bank by Deutsche Post, its parent, to end a near two-year drought of German initial public offerings. Others see it, more ambitiously, as the key to reviving Germany’s stalled equity culture and unlocking its long-desired banking consolidation.
There is a fair chance Postbank can at least break the IPO jinx, after aborted offerings this year from Siltronic and X-Fab. Both were in a technology sector which still makes investors nervous, while Postbank, Germany’s biggest retail bank, is seen as low risk. It also improved its prospects recently by reporting results that put other German banks to shame, raising return on equity from 2.9 to 7.6 per cent after tax.
Reawakening popular capitalism could take a little longer – even though this has proved more resilient in Germany than is sometimes said. True, investors came late and were scarred by the dotcom boom’s collapse: the number of adults who own shares has fallen from 21 per cent in 2001 to 17 per cent. But that is still nearly double the 1997 rate of 9 per cent. Most have hung on.
Like investors elsewhere, they are wary of going deeper. An absence of retail investors has been a common feature of the recent IPO revival in many countries. Belgacom, the Belgian telecoms operator, allocated just 15 per cent of shares to individuals, while Ireland’s Eircom allocated none.
As for banking consolidation, Postbank could certainly be an attractive partner. Commerzbank, which courted it six years ago, hints that it might be interested. A big barrier, though, is Deutsche Post’s plan to retain at least 50 per cent. Those hoping the Postbank IPO will be the catalyst for a wider shake-up of Germany’s fragmented market may have to wait a while yet.
