Deutsche Bank’s DWS plans special dividend and divestments

By Tom Sims and Marta Orosz

FRANKFURT (Reuters) -Deutsche Bank-owned fund manager DWS on Wednesday said it would propose a special dividend of up to 1 billion euros ($1.04 billion) in 2024 unless it makes any big acquisitions in the coming months.

DWS also said it would divest businesses and by 2025 generate 100 million euros in savings through cost-cutting measures that would be reallocated to growth areas.

In recent years, DWS has made big mergers and acquisitions a central part of its strategy.

But under the leadership of Chief Executive Officer Stefan Hoops, who took office in June, DWS has set itself a deadline of around 18 months for any deals.

“We haven’t done M&A in 20 years,” Hoops told reporters.

There were opportunities, he said, but if none works out, DWS should return capital to investors as a special dividend in 2024.

The German company meanwhile is trying to move on from allegations that it misled investors over its green credentials.

It has repeatedly denied those allegations and said on Wednesday it was nearing completion of an internal investigation and working closely with authorities to resolve the matter.

Shares rose 6% in midmorning trade, outperforming the small caps index, which was down 0.6%.

Deutsche Bank sold part of DWS in an initial public offering in 2018 but retained a stake of more than 79% in a corporate structure that gives it considerable influence over minority investors.

Hoops said that the German-specific KgaA structure was not “necessarily conducive to the attractiveness” of DWS shares but that it was up to Deutsche Bank to make any changes.

Deutsche Bank declined to comment.

Later on Wednesday, Hoops will brief investors and analysts on the strategy.

Other new targets DWS announced on Wednesday, include earnings per share of 4.50 euros by 2025 and an adjusted cost-to-income ratio of below 59%.

That compares with 2021, which was a particularly strong year, of 3.90 euros per share and a record low cost-to-income ratio of 58.1%.

($1 = 0.9572 euros)

(Reporting by Tom Sims and Marta Orosz; Editing by Cynthia Osterman, Paul Carrel and Barbara Lewis)