Deutsche Bank will set up a bad bank of 50 billion euros: FT By Reuters

(Reuters) – German Bank (DE 🙂 plans to reorganize its trading activities by creating a "bad bank" holding tens of billions of euros in assets and by cutting or closing its US equity trading and trading activities. trading, the Financial Times reported Sunday.

The bad bank would house or sell assets worth up to 50 billion euros – after adjusting for risk – and would include mainly long-term derivatives, the Financial Times reported, citing four people informed of the plan.

With the creation of the bad bank, CEO Christian Sewing keeps the German lender out of the investment bank and focuses on banking transactions and private wealth management, the paper said.

As part of the restructuring, the trading units of the shares and rates of the lender outside continental Europe will be reduced or fully closed, the report says.

The bank plans to reduce its US equity business, including prime brokerage and equity derivatives, to convince shareholders who are unhappy with its performance, four sources close to the case told Reuters.

"As we said at the May 23 General Assembly, Deutsche Bank is working on measures to accelerate its transformation in order to improve its sustainable profitability.We will inform all stakeholders if necessary" said Deutsche Bank in a statement sent Sunday by e-mail response to the FT report.

Sewing could announce the changes as well as the half-year results of Deutsche Bank at the end of July, announced the FT.