Deutsche Bank defended by German firms
Leading German firms have rushed to defend Deutsche Bank amid concerns over the troubled lender’s financial health.
Executives from Siemens, Daimler, Munich Re and BASF told German newspaperFrankfurter Allgemeine Sonntagszeitung they backed the bank.
“We stand with Deutsche Bank,” BASF chairman Juergen Hambrecht said.
Deutsche Bank is facing a $14bn ($11bn) fine in the US for mis-selling mortgage-backed bonds before the financial crisis of 2008.
Its shares fell sharply last week on fears the fine could cripple the bank, at one point dropping to their lowest level in 30 years.
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Reinsurance giant Munich Re’s chief executive, Nikolaus von Bomhard, told the Frankfurter Allgemeine Sonntagszeitung that he had followed the news, but saw no need to “reduce our business volume” with Deutsche Bank.
Dieter Zetsche, the chief executive of luxury car firm Daimler, also backed the bank, saying: “Deutsche Bank has a great tradition, a solid foundation and beyond that, a good future ahead. Of that I am convinced.”
Siemens boss Joe Kaeser said that the bank’s management “is pursuing the right goals and has our fullest confidence”.
On Friday, Deutsche chief executive John Cryan insisted the bank’s finances were strong, telling staff in an email that the lender had become the object of “hefty speculation” and that “new rumours” were causing the share price to fall.
Reports have also suggested the bank could be close to reaching a deal over a much lower fine of $5.4bn, boosting the shares.
Mr Cryan will attend this week’s annual International Monetary Fund meeting held in Washington where he is expected to try and negotiate a deal with the Department of Justice over the fine.
Last week, the German government also denied reports that it was preparing a rescue plan for the bank – Germany’s biggest lender – in case it could not afford to pay the US fine.
While Deutsche is a relatively small bank globally, it has significant trading relationships with all of the world’s largest finance houses.
In June, the IMF identified it as a bigger potential risk to the wider financial system than any other global bank.
First appeared at BBC