Depfa, the IFSC bank with German roots, suffered a loss of face yesterday after halting the sale of a subsidiary due to insufficient interest from buyers.
The bank said it had concluded that a sale of its Pfandbriefbank was not in the best interests of shareholders.
It said none of the bids submitted by a range of German and international bidders had met the group's "full internal value" for the business. The Pfandbriefbank was put up for sale in March last year, with the disposal originally expected to be complete by September. The proceeds were to be used by Depfa to help fund its US expansion.
The bank had been hoping to sell the Pfandbriefbank for its book value of €1.1 billion, plus an additional payment for goodwill.
A spokesman for Depfa said that the subsidiary would now be "re-integrated" into the group's internal structures. The move will not slow US plans or affect its IFSC operation, he added. The move received a mixed reaction in the market, with Depfa's shares losing almost 3 per cent of their value before recovering to close at €11.83, up 28 cents.
Last Friday, the last trading day before yesterday's announcement, the shares slumped by nearly 6 per cent, prompting an investigation yesterday by BaFin, the German financial regulator.
