UPDATE 1-Deutsche Bank asset shedding going well -CFO
* Expect to report "good progress" on asset shedding -CFO
* But "low-hanging fruit" is easy part of reduction -CFO
* CFO declines comment on third-quarter business results
FRANKFURT, Sept 18 (Reuters) - Deutsche Bank is making headway in its efforts to cut 250 billion euros ($334 billion) in assets as it adjusts to stricter bank rules, Chief Financial Officer Stefan Krause said on Wednesday.
"We'll be able to report good progress in the third quarter," Krause told reporters on the sidelines of a business conference, adding that the easier, early stages of the asset shedding plan had not harmed earnings at Germany's biggest lender so far.
"It always begins with the low-hanging fruit," he said.
Banks are coming under pressure in Britain, the United States and Switzerland to clamp down on risky investment banking and comply early with new rules rolled out in reaction to the financial crisis, in particular the leverage ratio, or limits on balance sheet size relative to capital held.
Krause said banks' moves to cut balance sheets to improve the ratio could prompt companies to rely more heavily on capital markets for their financing needs in future, which in turn implied greater use of investment banks.
"You cannot simultaneously eliminate investment banks and slash balance sheets; companies have to refinance themselves somewhere," he said.
Because German companies typically depend more on bank loans than their U.S. counterparts, there could be consequences if the simple leverage ratio that regulators are advocating is brought in as quickly and at the same level as in the United States, Krause said.
"In the short term, the identical leverage requirement cannot be introduced in Europe without damaging the economy," he said.
Deutsche unveiled its asset-cutting target in July, saying at the time it could trim the 250 billion euros - equivalent to 16 percent of its total assets - without hurting profit.
The lender's non-core unit alone has about 80-90 billion euros in assets that were up for sale, Krause said.
Reducing Deutsche's large derivatives book, particularly its derivatives business with other banks, offered an early opportunity to cut assets, he said.
Krause declined to comment on business developments in the third quarter.
He also said there was no news on the lender's planned sale of its BHF unit to a consortium headed by RHJ International (RHJI), saying Deutsche was waiting for a decision from regulators.
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