Deutsche Bank will reportedly gut its US equity and trading units as part of plan to create €50 billion 'bad bank'

Ralph Orlowski/REUTERS

Deutsche Bank CEO Christian Sewing

• Deutsche Bank is planning to overhaul its trading operations, including the creation of a "bad bank," the Financial Times reported.
• The newspaper said the proposed bad bank, known internally as the non-core asset unit, will comprise mainly of long-dated derivatives.
• "The cuts need to be radical," a senior figure at the bank told the Financial Times.

Deutsche Bank is planning to overhaul its trading operations, including the creation of a "bad bank" to hold tens of billions of euros of assets and shrinking or shutting its US equity and trading businesses, the Financial Times reported on Sunday.

The proposed bad bank, which is known internally as the non-core asset unit, will comprise mainly of long-dated derivatives, the newspaper reported, citing people familiar with the matter.

"The cuts need to be radical," a senior figure at the bank told the Financial Times. "It makes sense for us to put all these long-term, nil-revenue assets in a non-core unit."

The person continued to the FT: "We now have the capital and liquidity freedom to do what needs to be done; we couldn't have acted decisively much sooner because we needed to have built up those buffers."

Deutsche Bank said in a statement to the Financial Times: "Deutsche Bank is working on measures to accelerate its transformation so as to improve its sustainable profitability. We will update all stakeholders if and when required."

Deutsche Bank did not immediately respond to Reuters' request for comment.