Deutsche Bank to slash U.S.-based assets by $100 billion: FT

Sun Feb 23, 2014 6:16pm EST

A man walks past Deutsche Bank offices in London December 5, 2013. REUTERS/Luke MacGregor

A man walks past Deutsche Bank offices in London December 5, 2013.

Credit: Reuters/Luke MacGregor

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(Reuters) - Deutsche Bank (DBKGn.DE) has laid out plans to reduce its U.S. balance sheet as the U.S. Federal Reserve adopts new rules to shield the country's taxpayers from costly bailouts, the Financial Times reported on Sunday.

The lender is expected to reduce its $400 billion balance sheet in the United States to around $300 billion in part by reassigning operations such as its Mexican arm and its Frankfurt and Tokyo-based repo businesses that are currently part of its U.S. business elsewhere, the FT reported. (link.reuters.com/raz96v)

The financial daily said that the bank will also reduce a sizeable chunk of its repo business in the U.S. after discovering that some of its clients were not making use of its other offerings.

The bank may reassign U.S.-based operations to Europe or Asia to reduce assets in its U.S. division, the newspaper said.

Deutsche's Chief Financial Officer Stefan Krause told the FT that the lender was confident it would be able to meet the new capital and leverage requirements imposed on its U.S. unit.

Krause said that the balance sheet adjustment should not be seen as a pullback from the bank's U.S. franchise, where the lender is focused on growing its asset and wealth management business as well as battling to regain ground lost to U.S. rivals in its flagship fixed income arm.

Deutsche Bank plans to convert some of the existing debt its U.S. arm owes to its German arm into hybrid debt that would convert into equity capital under certain conditions, according to the FT.

Deutsche Bank is also hoping that the German regulator will soon give it the green light to raise up to 6 billion euros in additional capital through hybrid debt to help it improve its leverage ratio in Europe, the newspaper added.

According to the new capital rules for foreign banks announced by the Fed last Wednesday, the largest foreign banks, with $50 billion or more in U.S. assets, will need to set up an intermediate holding company subject to the same capital, risk management and liquidity standards as U.S. banks.

The Fed also gave foreign banks a year longer to meet the requirement to set up the new structure, with the new deadline set as July 1, 2016. Both changes had been widely expected in the market.

Foreign banks with sizable operations on Wall Street such as Deutsche Bank and Barclays (BARC.L) had pushed back hard against the plan because it means they will need to transfer costly capital from Europe.

(Reporting by Aashika Jain in Bangalore; Editing by Eric Walsh)

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Comments (2)
I don’t blame them for pulling out of America! With all Morgan Stanley and Deutsche banks top bankers flinging their selves out windows, having each other snuffed by the CIA thugs to stop them from whistle blowing and other just vanishing I would bail out of the country if I was a foreign banker too! Everyone knows their deep involvement with the 2 dozen dead bankers and their guilty consciences that tend to make them start topping themselves in mass it is better to just lay low. Now that everyone knows of the Zionist gang banksters involvement with 9/11 and all the other false flags I would suggest not coming back to the US either! Just accept the loss and be happy they escaped with their lives! The American citizens are enraged after being lied to all these years! It’s not like anyone with an IQ over 45 believed the Zionists “official” fairy tale anyway! The gig is up Neocons and elite demons! It’s time to pay the piper and stand up like men and pay for your crimes! They should at least apologize! Maybe some day a few honest law enforcement officers will actually arrest the perpetrators of the largest conspiracy and crime against humanity in the history of the planet! The Zionist house of Rothschild and the other elite families have been guilty of this on going atrocity/lying session for 100+ years! At least everyone finally knows the truth now and some of them are killing them self over it!

Feb 25, 2014 9:42pm EST  --  Report as abuse
I don’t blame them for pulling out of America! With all Morgan Stanley and Deutsche banks top bankers flinging their selves out windows, having each other snuffed by the CIA thugs to stop them from whistle blowing and other just vanishing I would bail out of the country if I was a foreign banker too! Everyone knows their deep involvement with the 2 dozen dead bankers and their guilty consciences that tend to make them start topping themselves in mass it is better to just lay low. Now that everyone knows of the Zionist gang banksters involvement with 9/11 and all the other false flags I would suggest not coming back to the US either! Just accept the loss and be happy they escaped with their lives! The American citizens are enraged after being lied to all these years! It’s not like anyone with an IQ over 45 believed the Zionists “official” fairy tale anyway! The gig is up Neocons and elite demons! It’s time to pay the piper and stand up like men and pay for your crimes! They should at least apologize! Maybe some day a few honest law enforcement officers will actually arrest the perpetrators of the largest conspiracy and crime against humanity in the history of the planet! The Zionist house of Rothschild and the other elite families have been guilty of this on going atrocity/lying session for 100+ years! At least everyone finally knows the truth now and some of them are killing them self over it!

Feb 25, 2014 9:42pm EST  --  Report as abuse
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