Allianz, Germany’s largest insurer, seeks to establish a "strategic advantage" through the sale of its Dresdner Kleinwort Wasserstein investment banking arm and will only sell the unit to a partner that can guarantee such an advantage, for example, a Japanese bank, as the insurer targets a possible regional distributor of its products. Allianz made it clear that the deal is not about capital as it is ready to spurn "pure financial" buyers.

Allianz is under obligation to support Dresdner Kleinwort Wasserstein with €2.4billion of capital until August 2005 although the bank is now able to use only €1.8billion of this allocation due to limitations placed on its risk-taking abilities.

DrKW was acquired as a unit of Dresdner Bank in 2001 and was making losses at the time of acquisition but after it got rid of bad debts the division began making profits. DrKW operating profits reached €55million in the three months to September.

Dresden bankers have voiced discontent about the DrKW’s uncertain future and threatened with massive exodus. Allianz insists however that DrKW top executives will share in the profit generated by the sale as they will be given profit-participation certificates with the same sale price multiple as Allianz.