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Dresdner eyes U.S. deal
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August 16, 1999: 9:24 a.m. ET
German bank looks for Wall St. buy; unveils 32% jump in earnings
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LONDON (CNNfn) - Dresdner Bank sparked more speculation of a deal with a Wall Street investment bank Monday, when Germany's third-largest bank said expansion in the United States is a "top priority."
Dresdner Chief Executive Bernhard Walter told a press conference at the unveiling of 32 percent higher half-year earnings that the number of possible partners in the United States is limited, although "we are long beyond the phase of simply calculating and thinking."
But the remarks fell flat with analysts, some of whom accused the German bank of foot-dragging in its oft-touted expansion quest.
"This is a disappointing thing for Dresdner," said Manfried Piontcke, a bank analyst with BT. Alex Brown in Frankfurt. "This strategy has been known for up to three years, but up until now no step has been taken."
Dresdner reported a 32 percent jump in first-half pretax profit to 880 million euros ($930 million), boosted by a doubling of trading income to 749 million euros.
Loan loss provisions over the period declined to 430 million euros ($454.68 million) from 559 million euros.
Dresdner admitted the size of Wall Street institutions precluded it from making an all-cash takeover offer.
While the bank's ambitions in the United States have been a matter of public record for quite some time, a deal has failed to materialize.
Archrival Deutsche Bank (FDBK) recently completed the purchase of New York-based Bankers Trust -- making it incumbent on Dresdner to complete a significant merger of its own if it wants to remain among the larger pan-European banks.
Walter confirmed that the bank is looking to further its ties with Banque Nationale de Paris. Dresdner and BNP have a broad agreement to cooperate, and they own small minority stakes in each other.
'Never say never…'
Publishing what was, in effect, a lengthy wish list, Walter also said he hoped to cooperate more closely with other banks in the retail banking arena, although he gave no specific details.
Dresdner also said a merger was theoretically possible with Germany's second-biggest bank, HypoVereinsbank, but not at the present time. "Never say never, but not now," said Walter, echoing an earlier statement from HypoVereinsbank's CEO.
Addressing the issue of his bank's North American ambitions, Walter said vaguely that Dresdner had a narrowed the field of prospective merger partners to around eight to 10 candidates, earmarking 11 billion euros for expansion.
Analysts say Dresdner's main dilemma as it forges ahead will be ensuring a firm foothold in the U.S. investment market, without sacrificing market share in European commercial banking. He suggested that financial institutions like Deutsche Bank, which manage to do both successfully, will be optimally positioned as the global banking industry continues to consolidate.
Piontcke said Dresdner should reinforce its alliance with France's BNP, which is duking it out with two domestic rivals in a bruising six-month takeover dispute that awaits final resolution.
"Up until now, (Dresdner) has only been a local player in Germany," Piontcke said.
Dresdner stock was up 0.6 percent at 41.00 euros in Frankfurt Monday afternoon.
-- from staff and wire reports
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Dresdner Bank
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