Chinese bank bids for German Dresdner Bank

August 26, 2008

, FRANKFURT, August 26 – The German insurance group Allianz is to decide on Sunday what to do with troubled banking unit Dresdner Bank, and is in talks with Commerzbank and the Chinese bank CDB, a press report said Tuesday.

The Allianz supervisory board has been called to meet on Sunday, the business daily Handelsblatt said, quoting sources close to the matter who added that the "race is still on" for Dresdner Bank, which suffered serious losses after the US subprime mortgage-linked market meltdown.

Allianz is expected to retain around 30 percent of the bank\’s capital however, to be able to continue selling insurance products at its branches, the newspaper said.

It added that CDB had offered more for the stake being offered, and would allow Allianz access to the huge Chinese insurance market.

But political considerations nonetheless allowed Commerzbank to remain "slightly ahead" of its Chinese counterpart, Handelsblatt said.

Dresdner Bank was worth between eight and nine billion euros (11.8-13.2 billion dollars), the report added.

Allianz paid 24 billion euros when it bought Dresdner Bank in 2001, but the tie-up has failed to fulfill expectations.

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