German Companies Consider Backing Deutsche Bank, HB Saysby
Capital injection seen in low single-digit billion-euro range
Government said to welcome private-sector plan, newspaper says
Some of Germany’s biggest publicly traded companies are prepared to buy shares in Deutsche Bank AG to prop up the lender in the event of a potentially crippling legal fine in the U.S., German newspaper Handelsblatt reported.
The chief executive officers of “several” blue-chip companies listed on DAX, the German index, have discussed the bank’s situation, the newspaper said, without identifying the companies or saying where it got the information.
The capital injection under discussion is in the low, single-digit billion-euro range, according to Handelsblatt, which said Deutsche Bank officials and high-ranking members of the German government have been informed about the plan. A Deutsche Bank spokeswoman declined to comment on the report, published after markets in Frankfurt closed.
The U.S. Justice Department has asked Deutsche Bank to pay $14 billion to resolve civil claims over its mortgage securities business in the run-up to the 2008 financial crisis. While analysts say they expect the department to settle for much less, the initial request has raised concerns about the bank’s ability to withstand the penalty.
The bank says it has no plans to increase capital or seek government support. The German government has ruled out state aid for the bank but supports the private-sector initiative, Handelsblatt reported.
Deutsche Bank shares have dropped 47 percent this year, leaving the bank worth little more than the amount the Justice Department requested.