German bank Commerzbank AG (CBK.XE) Monday said it would sell Dresdner Bank's Swiss asset-management business less than a year after it acquired all of Dresdner Bank from insurer Allianz SE (AZ).

Liechtenstein-based asset manager LGT Group, which is acquiring the Dresdner unit for an undisclosed sum, said the deal would increase its total assets under management to around CHF87 billion and double its asset base in Switzerland.

The disposal underlies a broader consolidation in the asset management industry that is expected as weary investors pull money out of accounts and wealth managers compete increasingly on the fees they charge.

It also shows Commerzbank is making progress in shrinking its balance sheet after the European Commission mandated in May that it refine its business model as a condition for receiving state aid from the German government.

At the end of 2008, the Swiss operations of Dresdner consisted of 311 employees and had a total of CHF9.4 billion in assets under management.

Analyst Olaf Kayser of Landesbank Baden-Wuerttemberg estimated the transaction value at around EUR100 million and said the sale wasn't surprising, given Commerzbank's mandate from Brussels to refocus its business.

Commerzbank is tasked with repaying billions of euros in state aid and minimizing losses from an internal holding unit that it said in March contained more than EUR55 billion in toxic assets.

A spokeswoman for Commerzbank said the sale of Dresdner Bank Switzerland wasn't specifically mandated by the European Commission.

LGT said the acquisition would help increase its market in target regions like Central and Eastern Europe and Latin America as well as Switzerland, which is a traditional center for asset managers given its tax laws and wealth.

At 1206 GMT, shares of Commerzbank were up EUR0.23, or 4.4%, at EUR5.28, while the broader German DAX was up 1%.

- By William Launder, Dow Jones Newswires; +49(0)6929725515; william.launder@dowjones.com