Deutsche Bank Looks to Shed Big Chunk of Wall Street Presence
July 02 2019 - 1:42PM
Dow Jones News
By Jenny Strasburg and Telis Demos
Deutsche Bank AG is taking steps to dismantle a pillar of its
Wall Street investment bank.
The troubled German lender has had discussions with Citigroup
Inc., BNP Paribas SA and others that could involve transferring
parts of its once-prized equities business, including operations
that serve hedge funds and other big trading customers, according
to people familiar with the matter.
The moves portend a dramatic reshaping of Deutsche Bank's U.S.
investment bank, a business it battled the likes of Goldman Sachs
Group Inc. and Morgan Stanley to build. Without a muscular equities
trading operation, Deutsche Bank will occupy a much smaller
footprint when competing with healthier U.S. rivals that have come
to dominate their European counterparts in the postcrisis era.
No agreements have been reached in what one of the people close
to the matter described as complex talks involving multiple
parties. Any deal is being weighed against the costs Deutsche Bank
would face to shut businesses, including severance costs, and costs
to hold on to long-dated derivatives positions.
Spokespeople for Citigroup, BNP Paribas and Deutsche Bank
declined to comment.
The talks are happening as the once-formidable German bank
prepares a major reorganization aimed at shedding thousands of jobs
and downsizing or abandoning whole business lines. Its equities
business, in which its prime brokerage sits, was once a key revenue
driver within the investment bank. It is now among those on the
chopping block as the bank ends long-frustrated efforts to compete
in an area dominated by stronger rivals, the people say.
The discussions, which are ongoing, could involve Deutsche Bank
employees moving to one or more other banks alongside client
balances, systems, and derivatives positions, some held by Deutsche
Bank to offset bets taken by its clients. The talks have included
corporate derivatives positions Deutsche Bank has looked to shed,
one of the people said.
Write to Jenny Strasburg at jenny.strasburg@wsj.com and Telis
Demos at telis.demos@wsj.com
(END) Dow Jones Newswires
July 02, 2019 13:27 ET (17:27 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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