Deutsche Bank gets top investor support
Deutsche Bank has secured backing from its largest investor and is seeking advice from other banks as it scrambles to restore market confidence undermined by a demand by US authorities for up to $ 14 billion over mis- selling allegations.
Qatari investors who own the largest stake in Germany’s largest bank do not plan to sell their shares and could consider buying more if it decides to raise capital, sources familiar with Qatari investment policy told Reuters.
“Purchasing more ( Deutsche Bank) stock – that could be considered ... which is not to say there are any imminent plans to do that,” said a source close to the Qatari investors who own just below 10 percent in Deutsche Bank. The source declined to be identified as the matter is confidential.
If a capital hike does turn out to be required, the Qatari investors would probably take part in it as they want to keep their roughly 10 percent stake, a second source close to the matter added.
Deutsche shares plunged to record intra-day lows below 10 euros last week on Friday and although they have since rebounded to just above 12 euros, they are 13 percent below last month’s peak and 46 percent below their close at the end of last year.
That implies the Qataris may have lost, on paper, over $1.2 billion on their investments in the bank.
German weekly Der Spiegel reported, without citing sources, that Qatari investors around Sheikh Hamad bin Jassim al-Thani, with backing from sovereign wealth funds, were mulling taking a 25 percent in the lender, sending Deutsche Bank’s US-listed shares higher.
But sources familiar with the situation told Reuters it was unlikely that the Qataris would acquire a stake as big as 25 percent.
Deutsche Bank declined to comment and Sheikh Hamad was not immediately available for comment.
Deutsche Bank CEO John Cryan, who is attending the International Monetary Fund and World Bank’s autumn meetings in Washington, is due to meet with the Department of Justice as well as with senior managers of other investment banks in the United States to discuss the lender’s options, people familiar with his schedule said.
However, the talks with other bankers are expected to focus on immediate steps the German bank may be able to take such as asset sales, rather than asking shareholders for fresh cash.
“The cap hike issue will unlikely be the focus of most of those meetings,” one of those people said, adding that pulling off a capital- raising would be a wellrehearsed exercise which does not need too much advance discussion.
Deutsche Bank declined to comment on Cryan’s discussions.
Separately, German Economy minister Sigmar Gabriel said while Deutsche Bank faced enormous challenges with potential fines in the United States, moves by its leadership to change the bank’s business model showed it was reacting to the risks.
Gabriel said the government did not have its own risk assessment for the bank, but that Germany was keen to see the 146-year-old bank succeed in the longer term. “It’s completely obvious that we have an interest in Deutsche Bank again becoming a stable financial institution that is successful nationally and internationally,” Gabriel said.