Deutsche Bank cuts balance sheet to meet regulatory requirements

31 July 2013

Deutsche Bank has confirmed it will significantly reduce its balance sheet in order to comply with stricter leverage rules put in place by regulators.

The bank recently missed analysts’ expectations in its second quarter earnings results and said it would lower its balance sheet by a further €250 billion ($331 billion) in the next two years after having already slashed its size by €100 billion.

This latest move will help the institution get in line with its European rivals by raising its leverage ratio to 3.6 per cent by 2015, as prescribed under the incoming Basel III ruling.

UK-based Barclays has also performed similar moves to the German institution in order to raise its capital. The firm will issue £5.8 billion ($8.8 billion) in new shares to current holders as part of an initiative to plug a £12.8 billion capital shortfall created by new regulatory demands.

By Gary Cooper

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development