Lloyds TSB tempted by Allianz sale of Dresdner Bank

by Gill Montia

Story link: Lloyds TSB tempted by Allianz sale of Dresdner Bank

Lloyds TSB is reported to be preparing a bid for German bank, Dresdner, which forms part of the Allianz group and operates its investment banking business via Dresdner Kleinwort.

The credit crisis has left Lloyds TSB relatively unscathed and the bank could now benefit from the current decline in banking valuations in Europe and the US.

Allianz has already declared that it is auctioning Dresdner, which is one of the largest retail banking operations in Europe. The price tag for the entire business could exceed £8 billion.

However, it is possible that a deal with Lloyds TSB could involve Allianz taking over the bank’s Scottish Widows life assurance business in exchange for Dresdner’s retail operations.

At this point, Lloyds’ intentions over Dresdner Kleinwort are not clear. The division has been denting profit at Allianz because of writedowns in relation to asset-backed securities.

In April of this year, Allianz announced that it would split Dresdner Kleinwort from the rest of Dresdner Bank in a move that would pave the way for the sale of either business.

Analysts expect a period of consolidation in the European banking sector, following the major losses so far revealed in the sub-prime crisis.