Merkel rules out assistance for Deutsche Bank: reports
Chancellor Angela Merkel has ruled out any state assistance for Deutsche Bank AG in the year heading into the national election in September 2017, Focus magazine reported, citing unidentified government officials.
The German leader also declined to step into the Frankfurt-based bank’s legal imbroglio with the US Justice Department, which may seek as much as $14 billion (Dh51.4 billion) in sanctions against Deutsche Bank’s mortgagebacked securities business, the magazine said. A German government spokesman declined to comment on the report Saturday. A Deutsche Bank spokeswoman also wouldn’t comment.
The finances of Germany’s biggest lender, which has lost almost half of its market value this year, are raising concern among German politicians. At a closed session of Social Democratic finance lawmakers last week, Deutsche Bank’s woes came up alongside a debate over Basel financial rules, according to two people familiar with the matter.
Germany’s government expects a “fair outcome” probe, the Finance Ministry said on September 16.
Deutsche Bank has said it’s unwilling to pay the maximum amount sought by US authorities as investors fret about the bank’s capital. Chief Executive Officer John Cryan, 55, has struggled to boost profitability by selling riskier assets and eliminating jobs as unresolved legal probes and claims add to concerns that the lender will be forced to raise capital.
Focus cited a discussion between Merkel and Cryan in the summer. in the US problem is that it is coming in this incredibly uncertain environment,” said Edward Alden of the Council on Foreign Relations, a New York think tank.
The rise of protectionist views in the US with the candidacy of Republican presidential nominee Donald Trump and in Europe, with Brexit, has electrified talks and complicated reactions from current governments. “The danger is that what should be routine disputes become harder and harder to deal with in this environment,” said Alden.