As part of its restructuring, Deutsche Bank has sold unwanted assets to Goldman Sachs, related to emerging-market debt, part of Deutsche’s plan to wind down unwanted securities.
Deutsche has hived off billions in assets into a so-called capital release unit, also called a bad bank. The sale to Goldman marks the latest in a series of disposals of such assets.
The unit contained €177bn (US$195bn) in leverage exposure at the end of the third quarter. The bank aims to reduce that to €119bn by the end of this year.
It is unclear how much the sale to Goldman moves towards that goal because the nominal US$50bn is not comparable to leverage exposure, a measure of risk. Goldman purchased the debt at a deep discount and believes it can make a modest profit on the deal. The book most likely includes derivatives, as well as emerging-market debt.
Deutsche has sold packets of equity derivatives in three auctions. It is now trying to sell more complicated equity derivatives, a process that will take a couple of years.
Deutsche has also struck a deal to transfer its prime brokerage business to BNP Paribas.