In November 2012, we established the NCOU. The NCOU operates as a separate corporate division alongside Deutsche Bank’s core businesses. The NCOU manages assets with a value of approximately € 100 billion and Basel 2.5 risk-weighted assets (“RWA”) equivalent of € 80 billion, as of December 31, 2012.
As set out in Strategy 2015+, our objectives in setting up the NCOU are to improve external transparency of our non-core positions; to increase management focus on the core operating businesses by separating the non-core activities; and to facilitate targeted accelerated de-risking.
In addition to managing our global principal investments and holding certain other non-core assets to maturity, targeted de-risking activities within the NCOU will help us reduce risks that are not related to our planned future strategy, thereby reducing capital demand. In carrying out these targeted de-risking activities, the NCOU will prioritize for exit those positions with less favorable capital and risk return profiles to enable the Bank to strengthen its Core Tier 1 capital ratio under Basel 3.
The NCOU’s portfolio includes activities that are non-core to the Bank’s strategy going forward; assets materially affected by business, environment, legal or regulatory changes; assets earmarked for de-risking; assets suitable for separation; assets with significant capital absorption but low returns; and assets exposed to legal risks. In addition, certain liabilities were also assigned to the NCOU following similar criteria to those used for asset selection, e.g. liabilities of businesses in run-off or for sale, legacy bond issuance formats and various other short-dated liabilities, linked to assigned assets.
In RWA terms the majority has been assigned from CB&S, and includes credit correlation trading positions, securitization assets, exposures to monoline insurers and assets reclassified under IAS 39. Assets assigned from PBC include Postbank commercial real estate assets outside core markets, Postbank capital-intensive structured credit products, selected foreign residential mortgages and other financial investments, such as the structured credit and the GIIPS portfolio which have already been in run-off for a number of years, and the repo matched book with balance sheet leverage no longer deemed strategic for Postbank. NCOU’s portfolio also contains all those assets previously booked and managed in the former Group Division CI. These are the Bank’s global principal investment activities and include our stakes in the port operator Maher Terminals, The Cosmopolitan of Las Vegas and BHF-BANK.
Effective January 1, 2011, the exposure in Actavis Group was transferred from CB&S to former CI. During the fourth quarter 2012, we completed the sale of Actavis Group from the NCOU.
As of January 1, 2011, BHF-BANK, was transferred from AWM to former CI.
In December 2010, the former CI transferred the investment in Deutsche Postbank AG to PBC. Also in December 2010, The Cosmopolitan of Las Vegas property started its operations.