NEW YORK (Reuters) – Some senior Deutsche Bank AG officials have discussed the possibility of putting additional problematic assets worth billions of euros into a unit it created earlier this year, if the bank is able to sell assets already held within that “bad bank,” according to three bank sources.
The discussions in recent weeks, which have not been previously reported, are preliminary, the sources said, adding that there is nothing imminent. A Deutsche Bank spokesman said the bank has no plans to add additional assets into the so-called capital release unit, or bad bank.
Options - Discussion - Levels - Bank - Executives
Nevertheless, it is one of the options that has come up for discussion at the highest levels at the bank, as executives grapple with the problem of having to turn around the bank on a tight budget, according to the three people familiar with the talks.
Deutsche Bank needs more capital to be able to absorb the losses that will likely come from shedding problematic assets, such as long-dated derivatives, that are still on its books, the people said.
Euros - Capital - Years - Room - Investors
But, after raising 29.3 billion euros ($32.3 billion) in capital over the past nine years, it does not have room to ask investors for more, the sources added.
For investors, still nursing a 75% fall in the bank’s share price over the past four-and-a-half years, it means that the road to recovery for the bank will most likely be long.
Sewing - John - Cryan - April - Year
Christian Sewing, who took over from John Cryan in April last year, is looking to reshape Deutsche Bank after a multi-year bet on building a global investment banking business unraveled.
In July, he set up the bad bank, called a capital release unit (CRU), to house 74 billion euros of risk-weighted assets the bank had identified for wind-down or sale, part of a broader restructuring that will see 18,000 jobs go as it...
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