Deutsche sells margin lending to St George
Deutsche Bank has sold off its Australian margin lending business to theSt George Bankin the face of mounting competition in an increasingly crowded margin lending market.
The sale, finalised today, will see St George take over ownership of the business, complete with some Deutsche staff and a $360 million loan book, in one month’s time.
Announcing the sale,Deutsche Asset Management’sregional chief operating officer, Michael Monaghan, indicated the division’s fate was sealed by a dwindling market share and an inability to achieve a critical mass.
“When we started in this business, there were only 3 or 4 competitors, but over the last few years this has grown to 15 or 20,” he says.
“We think that to be successful, you need to have $800 million plus, so we needed to either get bigger or get out.”
Deutsche’s margin lending business, which has been operating within the group’s private client and asset management division since 1995, is made up of two companies, Deutsche Equity Lending Australia and Deutsche ML Nominees.
Deutsche Equity Lending Australia was the entity responsible for making margin loans against Australian listed securities and managed funds, while Deutsche ML Nominees held securities on behalf of margin lending clients.
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