(Add Deutsche Bank statement, FT report details)
June 16 (Reuters) – Deutsche Bank 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 trading activities. Shares and 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 here, citing four people informed about 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 lender's shares and interest rate trading units 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 AGM, Deutsche Bank is working on measures to accelerate its transformation to improve its sustainable profitability. We will update all stakeholders if necessary, said Deutsche Bank in a statement sent Sunday by e-mail in 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.
$ 1 = 0.8919 euros
Report by Ishita Chigilli Palli and Kanishka Singh in
Bengaluru; Edited by Sonya Hepinstall and Peter Cooney