Deutsche Post Postbank Europe benchmark plan
Deutsche Post, the German postal and logistics group, plans to benchmark Postbank against eight European banks to value its financial services arm when it is floated later this year. Postbank is Germany’s biggest retail bank, with 10m customers. The banks selected as a benchmark for the initial public offering – Royal Bank of Scotland, Alliance & Leicester, Unicredito, Banco Popular, Banca Populare, Banco Espirito Santo, Erste Bank and Svenska Handelsbanken – have a strong focus on domestic private client business. The majority of the banks have a far higher return on equity. Postbank’s return on equity of 10 per cent compares with a peer group average of 17.4 per cent. Deutsche Post intends to sell as much as 50 per cent less one share of the retail bank to raise up to EUR3bn (USD3.8bn) in what would be one of Germany’s biggest IPOs for years. The group intends to use the proceeds to cut debt and boost investment in its pan-European infrastructure. Deutsche Post is expected to float Postbank on June 21, earlier than a previously announced date in the autumn. Postbank, which has also been a pioneer in introducing telephone and online banking in Germany, said in December it expected 2003 pre-tax profit of EUR500m and was aiming for a pre-tax return on equity of as much as 15 per cent in 2004.
