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For Sale: Investment Bank, one troubled owner

August 11, 2009

MEDIA-PROPS/So Deutsche Bank has written a large cheque to bail out Sal. Oppenheim — allowing the German private bank’s investors to subscribe to a 300 million euro share issue  which raises its equity capital to around 2.1 billion euros.

This is just part of the story though. The next step is apparently for Deutsche to take a stake in the 220-year-old private bank and for Sal. Oppenheim to sell off its investment banking business.

Sal. Oppenheim and Deutsche are giving little away — although the private bank says on its website that shareholders made the injection, which was financed by Deutsche and is the first step in a process of establishing a “strategic partnership” with the German lender.

A source tells Reuters that “interested parties” are already knocking on the door to buy Sal. Oppenheim’s investment banking business, which made a loss in 2008 — largely because of share trading losses.

The investment bank had been Sal. Oppenheim’s main money machine in recent years but in 2008 dragged its parent nearly 120 million euros into the red — its first annual loss since the Second World War.

Sal. Oppenheim’s 450-strong investment banking team not only sells M&A advice but also trades.

The challenge now is for the investment banking wing — led by partner Dieter Pfundt — to regain its magic touch and secure a decent price for its own business.

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