NEW YORK: Deutsche Bank's turnaround strategy rests in large part on shedding 288 billion euros of unwanted assets. Three bank insiders said it will take years, tying up capital that could have generated income of 500 million euros a year.
Deutsche Bank has held on-and-off talks with potential buyers of some of those assets over the past two years, three people said. The sales did not happen because the prices offered would have resulted in hundreds of millions of euros in losses for the bank, they said. The 500 million euro figure is measured by how much the capital requirement is dragging on Deutsche Bank's return on tangible equity, the people said. It is a key measure of how much profit a bank generates from shareholder funds.
It is doubtful that the bank would be able to sell the positions in their entirety without taking a large write-down requiring the bank to raise capital from shareholders, the three people said.
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