Deutsche Bank wants to dump assets into 'bad bank'

Credit: Reuters - Business (Amazon FireT
Published on June 17, 2019 - Duration: 01:20s

Deutsche Bank wants to dump assets into 'bad bank'

Deutsche Bank is planning to overhaul its trading operations by creating a so-called bad bank to hold tens of billions of euros of non-core assets, a source close to the matter said on Monday.

Pascale Davies reports.

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Deutsche Bank wants to dump assets into 'bad bank'

Germany's struggling lender Deutsche Bank has drawn up plans for a drastic restructuring to its trading operations, which will involve creating a so-called "bad bank" to hold over 56 billion dollars of assets.

That according to a source close to the matter speaking on Monday and a report in the Financial Times, which said that as part of the overhaul, the bank's equity and interest rate trading outside Europe would be shrunk or completely closed.

Reuters reported last month that Deutsche is also planning cuts at its U.S. equities business, to win over shareholders who are unhappy about its performance.

The plans would mark a further shift away from investment banking towards less risky and sustainable forms of revenue such as transaction banking.

Germany's largest lender has had difficulty generating sustainable profits since the 2008 financial crisis.

A big fine over money laundering, abortive talks about a merger with Commerzbank, and failed stress tests have done little to help.

Shares in Deutche recently hit record lows but on Monday (June 17) were up over 3%.

The bank's CEO is expected to announce the changes in July.

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