Deutsche Bank is planning to slash assets held by its US unit by up to 25% to US$100 billion by re-assigning some operations to Europe or in Asia.
The move follows new rules introduced by the US Federal Reserve on foreign banks to safeguard the country’s taxpayers from costly bailouts, reported Financial Times.
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Stefan Krause, Deutsche’s chief financial officer, said that the bank will be able to meet the new capital and leverage rules imposed on its US arm.
As part of the move, the bank is planning to reduce its US$400 billion balance sheet in the US to around US$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 US business.
The bank will also decrease the size of its repo business in the US after some of its clients failed to use its other offerings.
In addition, Deutsche Bank hopes to convert some of the existing debt in the US arm as hybrid debt to the German arm that would convert into equity capital under certain conditions.
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By GlobalDataDeutsche Bank plans to raise an additional capital up to 6 billion via hybrid debt to improve its leverage ratio in Europe.
