Deutsche Bank Reorganizes U.S. Unit Amid Capital Regulations

Deutsche Bank AG (DBK), Germany’s biggest lender, implemented a plan to alter the status of its main U.S. subsidiary in response to capital rules being imposed under a U.S. regulatory overhaul.

The division, known as Taunus Corp., is no longer a U.S. bank holding company effective Feb. 1 after the German firm reorganized the ownership of its U.S. banking subsidiaries, Deutsche Bank said in a report published on its website on March 20. Deutsche Bank Trust Corporation is now the “top-tier” U.S. bank holding company subsidiary, the firm said.

Deutsche Bank shareholders in May 2011 approved plans to reorganize the U.S. unit to meet new regulations without requiring additional capital. Chief Financial Officer Stefan Krause said last month the project is “ongoing.” Overseas lenders including Barclays Plc (BARC) are altering their U.S. holding subsidiaries because the Dodd-Frank Act of 2010 would otherwise force the divisions to comply with the same capital rules as domestic banks.

“We have always had and will continue to have appropriate capital levels in all our U.S. regulated entities,” spokesman Christian Streckert said by e-mail today. “This action, which does not diminish any of our regulatory oversight, allows us to streamline our organizational structure, strengthening an already strong institution.”

Deutsche Bank’s outgoing Chief Risk Officer Hugo Banziger said in June 2010 the bank’s U.S. holding structure was designed to ensure the lender had the same tax benefits as U.S. competitors. The operating units are “well capitalized,” Banziger said at the time.

The Wall Street Journal reported earlier today that Taunus was reorganized on Feb. 1.

To contact the reporter on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Edward Evans at eevans3@bloomberg.net

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