(Reuters) – Deutsche Bank (DE 🙂 plans to revise its trading business by creating a "bad bank" to keep tens of billions of assets and shrink or closing its US stock and trading businesses, the Financial Times reported on Sunday.
The bad bank would own or sell assets valued at up to EUR 50 billion ($ 56.66 billion) ̵[ads1]1; after adjustment for risk – and consists mainly of long dated derivatives, FT reported, and quoted four people briefed on the plan.
With the creation of the bad bank, CEO Christian Sewing shifts the German lender away from the investment bank and focuses on the transaction bank and private wealth management, the newspaper said.
As part of the restructuring, the lender's equity and interest rate trading units outside continental Europe will shrink or close completely, the report says.
The bank plans to cut its US shares, including first-class brokerage and equity derivatives, to win over shareholders dissatisfied with the result, four sources familiar with the case told Reuters in May.
"As we said at the general meeting on May 23, Deutsche Bank is working to accelerate its transformation to improve sustainable profitability. We will update all stakeholders if and when needed, Deutsche Bank said in an email message on Sunday in response to the FT report.
Sewing could announce the changes along with Deutsche Bank's half-year results at the end of July, FT reported.
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