Deutsche Bank AG has “hidden reserves” that may help pay coupons on its riskiest bonds in a crisis, according to the German lender’s chief financial officer.

“What we do not disclose, and can’t disclose, are additional reserves” that may come from moving profits at subsidiaries or re-valuing assets on Deutsche Bank’s balance sheet, CFO Marcus Schenck said in a conference call on Wednesday. “Let me call it hidden reserves,” he said in response to an analyst’s request for clarity on what would be available in a crisis.

Deutsche Bank is trying to reassure investors it will be able to honor debt commitments as it prepares to sell junior bonds for the first time in over a year. Investor concerns that declining profitability and German accounting rules would prevent the country’s biggest lender from paying coupons on its so-called additional Tier 1 debt, sparked an industrywide selloff in February.

German banks can only make optional payments such as dividends, bonuses and coupons on the bonds if they have sufficient “available distributable items” and Deutsche Bank has thinner coverage than other major banks. Yields on its AT1s have risen this year and the cost of insuring against losses on its debt exceeds peers.

Deutsche Bank will hold a series of fixed-income investor meetings starting on Monday before a possible sale of subordinated, Tier 2 debt, according to a person familiar with the matter who asked not to be identified because the information is private.

“We are under no pressure to issue AT1 paper in the near future,” Schenck said. “We can easily wait more than a year or so.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE