Germany's Deutsche Post will take an 8 percent stake in Germany's biggest bank, Deutsche Bank, in a move that will see Deutsche become the largest shareholder in Post's retail banking operations.
Deutsche Bank CEO Ackermann called the result "very disappointing"
Deutsche Bank said the move was part of an "improved structure" for its planned takeover of Deutsche Post's Postbank unit, in order to enable a more "capital-efficient" deal.
On Wednesday, Jan. 14, Deutsche Bank unveiled a fourth-quarter loss of 4.8 billion euros $6.3 billion), wiping out profits made earlier in the year and leaving it 3.9 billion euros in the red for 2008.
"This development reflects exceptional market conditions, which severely impacted results in the sales and trading businesses, most notably in credit trading," the bank said in a statement.
At midday Wednesday, Deutsche Bank shares had slumped 8.8 percent to 22.16 euros a share. In 2007, the bank recorded a record profit of 6.5 billion euros.
Postbank is home to many consumer customers
"We are very disappointed at this fourth quarter result, which leads to a loss for the year," said Josef Ackermann, chairman of Deutsche Bank's management board.
"The exceptionally difficult market environment of the quarter exposed some weaknesses in our platform, and we have determined a number of measures to address these weaknesses. Implementation of these measures is already under way," he said.
Post jumps in to aid Deutsche Bank
Meanwhile on Wednesday, Deutsche Post confirmed its plan to take a stake in Deutsche Bank, thus helping it securing the sale of the Post subsidiary Postbank, to Deutsche Bank.
Financial sources reported that Deutsche Post would take a stake of around 8 percent in Deutsche Bank for a period of less than 12 months, under a renegotiated deal.
In September, the two sides had agreed on the sale of Postbank, but that bank's shares have dropped precipitously since the deal was inked.
New deal speeds transaction
Under the new deal, valued at 4.9 billion euros, Deutsche Bank will partly pay for the purchase in Deutsche Bank shares and will take over the Postbank earlier than planned.
The new plan allows Deutsche Bank to retain more of its capital, while the Post can then "exit its banking business more quickly and with less risk," both companies said Wednesday.
The move makes the state, which owns eight percent of Deutsche Post, a partial owner of the nation's largest bank.