Deutsche Bank (DBK) AG, Europe’s largest investment bank by revenue, will shrink its U.S. division by as much as 25 percent to meet Federal Reserve capital rules, according to a person briefed on the matter.
Deutsche Bank plans to reduce the balance sheet of its U.S. business to about $300 billion from $400 billion, in part by moving assets out of the country, said the person, who asked not to be identified because the matter isn’t public. The bank’s press office declined to comment.
The Fed has approved new standards that will require the biggest foreign banks in the U.S. to hold more capital in the country to protect taxpayers from having to bail them out in a crisis. The step, announced last week, marks further fragmentation of global financial regulation and risks raising borrowing costs for banks and clients, the affected firms say.
The asset reduction, which includes units focused on Mexico and repurchase agreements, excludes $200 billion held at Deutsche Bank’s U.S. business that isn’t affected by the Fed’s planned requirements, the person said.
The Financial Times reported the plan earlier today without saying where it got the information. The measure doesn’t represent a retreat from the U.S., the FT cited Chief Financial Officer Stefan Krause as saying.
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