October 27, 2016 / 2:38 AM / 2 years ago

UPDATE 1-Deutsche Bank to sell Mexican units to local peer InvestaBank

(Adds official confirmation, context)

MEXICO CITY, Oct 26 (Reuters) - Mexico’s InvestaBank said on Wednesday it had agreed to buy two Mexican units of Deutsche Bank as the German lender exits non-core businesses amid a drive to cut costs in a major organisational shake-up.

InvestaBank said in a statement it would seek a capital increase of some 2.5 billion pesos ($133 million) to help fund the purchase of the units, Deutsche Bank Mexico and Deutsche Securities, without disclosing the price tag for the deal.

Deutsche Bank is under the threat of a $14 billion dollar fine from U.S. regulators, prompting management to rethink its strategic overhaul announced last year.

Part of the overhaul included plans to shut down operations in Argentina, Chile, Mexico, Peru and Uruguay.

Deutsche Bank’s first office in Mexico was opened in 1957, according to the bank’s website.

InvestaBank was created in 2014 from the acquisition of Royal Bank of Scotland’s operations in Mexico.

The Deutsche Bank deal is still subject to regulatory approvals, the statement said.

$1 = 18.7520 Mexican pesos Reporting by Noe Torres; Editing by Kenneth Maxwell

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