© REUTERS/Simon DawsonFILE PHOTO:The logo of Deutsche Bank is pictured on a company's office in London, Britain July 8, 2019.
The assets, related to emerging-market debt, were part of Deutsche's unit to wind down unwanted securities, the people said, confirming a development first reported by Bloomberg.
As part of a broad overhaul, 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 177 billion euros ($195 billion) in leverage exposure at the end of the third quarter. The bank aims to reduce that to 119 billion euros by the end of this year.
It is unclear how much the sale to Goldman chips away at that goal because the nominal $50 billion is not comparable to leverage exposure, a measure of risk.
Comment: As noted in Global economy will remain fragile in 2020 - Moody's:
Other risks to the global economy relate to high leverage and the historically high number of debt issuers with weak credit quality accessing the credit markets.
Goldman purchased the debt at a deep discount and believes it can make a modest profit on the deal, according to a fourth person familiar with the matter. The book likely includes derivatives, as well as emerging-market debt, the person added.
Deutsche has said it sold packets of equity derivatives in three auctions. It is now trying to sell more complex 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 (BNPP.PA).
Deutsche Bank and Goldman Sachs declined to comment.
Comment: Deutsche Bank certainly seems to be at the center of the troubles plaguing the economic system. It has also been one the main perpetrators of them. As it is, it appears with the help of their colleagues, they're managing to postpone the inevitable. Will they be one the first dominoes to fall, a la Northern Rock or Lehman Brothers, that signal the uncontrollable collapse of the markets?
- Here it comes: AI roll-out enables Deutsche Bank to fire over 4,000 employees, another 18,000 to follow by 2022 (24th November)
- Deutsche Bank slashes 18,000 jobs in brutal cull, "financial system is in trouble" (8th July 2019)
- Whistleblower exposes biggest money laundering scandal in European history involving Deutsche Bank, JP Morgan and Danske Bank (19th November 2018)
- Banking giants ANZ, Deutsche Bank and Citigroup to be prosecuted by Australia for running "criminal cartel" (1st June 2018)
- Deutsche Bank, HSBC & Citigroup get 'slap on the wrist' in Libor rigging case (13th October 2017)
- Deutsche Bank admits to rigging the global precious metals market (14th April 2016)
See also: Alastair Crooke: Germany stalls and Europe craters