Yahoo Finance Deutsche Bank (DB) Plans to Discontinue Numis' US Operations
Deutsche Bank DB is set to shut down the U.S. operations of its London stockbroker subsidiary, Numis Securities. This decision comes to light as the company attempts to streamline its operations following a decrease in Numis’ estimated value.
In October 2023, Deutsche Bank acquired Numis for £410 million ($500 million) and rebranded it as Deutsche Numis. However, in February 2024, it lowered the estimated value of the company by £200 million ($253 million) due to impairment charges that are often associated with overpaying for a business.
Currently, Numis' U.S. office has around 12 employees, half of which will be transferred to Deutsche Bank's headquarters in New York, and the remaining workforce will be offered jobs elsewhere in the bank. Additionally, the Germany-based bank relocated Numis’ U.K. analysts to its new office in London, while 15 of its own equity sales employees were transferred into offices used by Numis.
While DB will continue its operations in Ireland, it plans to discontinue Numis’ European Union stockbroking operation in the country, called Numis Europe. The staff from Numis Europe will be transferred to Deutsche Bank’s Frankfurt office.
DB's decision to cease Numis' U.S. operations and make efforts to divest its other European offices highlights its commitment to improving efficiency and maximizing shareholder value amid a rapidly evolving market.
Over the past six months, the company’s shares on the NYSE have gained 37.8% compared with the industry’s growth of 14.4%.
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Currently, DB carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Banks Making Divestitures to Exit From Certain Markets
Last month, The Bank of New York Mellon Corp. BK entered into an agreement with Computershare to divest BNY Trust Company of Canada. The deal, expected to be completed in the second quarter of 2024, is still subject to customary and regulatory approvals. Notably, the financial terms of the transaction were not revealed.
The divestiture is in alignment with BK’s strategic focus to gain a foothold in foreign markets outside Canada, while for Computershare, the deal fits within its core strategy to enhance the footprint and scale of corporate trust business within North America.
Similarly, HSBC Holdings PLC HSBC has entered into a joint agreement with Grupo Financiero Galicia (“Galicia”) to sell its Argentina business. The transaction is valued at $550 million and aims to shift its focus on the core Asian operations.
Per the agreement, Galicia is set to acquire HSBC’s entire Argentina business, including banking, asset management and insurance. The firm will also assume $100 million of subordinated debt issued by HSBC Argentina and held by other HSBC entities. The consideration is subject to adjustments for the business results and fair value gains or losses on HSBC Argentina’s securities portfolios for the period between Dec 31, 2023, and the closing of the transaction.
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