Deutsche continues to scale back securities unit


'It’s hard to make money in these kinds of businesses'.

Deutsche Bank is exiting physical trading of precious metals as it scales back its securities unit to improve returns.

Bloomberg News reports that some parts of the business may be shifted to other units of Deutsche Bank and the firm will continue to trade derivatives linked to precious metals, a spokesman for the bank said in a statement.

Global banks are exiting or paring back their commodities arms as regulators order them to increase buffers for potential trading losses and avoid a repeat of taxpayer-funded rescues. Deutsche Bank’s move is part of an overhaul of its securities unit to help boost profitability and increase the proportion of capital on its balance sheet by shrinking assets.

“It’s hard to make money in these kinds of businesses when you load in the capital requirementsand the lower trading environment,” said Arun Melmane, a London-based analyst at Canaccord Genuity Corp. who recommends investors hold the shares. “We’re going to see a number of such exits as banks go through their portfolios and ask if they should still be in certain businesses.”

To access the complete Bloomberg News article hit the link below:

Deutsche Bank Shutters Precious Metal Trading Amid Cuts

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