Deutsche Bank wants to end ties with long-time ally Donald Trump, is it sensing a change?
Deutsche Bank AG has faced the heat over its involvement with President Donald Trump and if reports are to be believed, the financial institution is now looking for avenues to conclude its relationship with the latter after the presidential elections get over. According to an exclusive report by Reuters, Deutsche Bank AG is tired of the relentless negative publicity that it has faced from its ties with Trump, according to three of its senior informed officials.
Deutsche Bank has more than $330 million in loans outstanding to the Trump Organization – the president’s group which is currently being looked after by his two sons, as per filings made by the president to the US Office of Government Ethics in July and a well-placed source in the bank. Two bank officials have informed that the three loans that are against Trump's properties and start coming due in a couple of years are current on payments and personally guaranteed by the commander-in-chief himself, the Reuters report added.
Trump’s finances have remained under the scanner and his opponents have been targeting him, as it was in 2016, over the disclosure of his taxes.
The New York district attorney’s office, which has been seeking the president’s tax records, even subpoenaed Deutsche Bank last year, making evident wide-ranging a criminal probe into the president's business practices. The New York Times reported citing four unidentified sources. As it faced more heat over its ties with Trump, a management committee in the bank that oversees the institute’s reputational and other risks in the Americas zone has talked over ways in which it could put an end to the relationship, Reuters said citing the bank’s officials. One of them conceded that the bank has, over the years, lent Trump more than $2 billion.
One option has been to sell the loans but who will buy it?
One of the options that the bank committee discussed, according to the Reuters report that cited the officials, is to sell the loans in the secondary market but it did not gain much traction because it was not clear who would buy the loans and deal with the problems that come with them.
Although Deutsche Bank’s efforts towards assessing its relationship with Trump have not been unknown, its more recent endeavors towards ending all ties with the president in light of the presidential election were not reported earlier.
Neither the bank nor Trump Organization nor the White House responded to questions that were posed by Reuters in relation to the matter.
Deutsche Bank has faced serious backlash
Deutsche Bank, which started lending to the businessman-politician in the late 1990s, has found itself dragged into various political controversies and investigations into Trump’s finances and alleged connections with Russia.
Massachusetts Democratic Senator Elizabeth Warren, who is also a member of the Senate banking committee, has earlier called for a probe into the bank over its money-laundering controls and sought answers from the institute about the relationship with the president and his family.
The overall effect of these saw the bank suffering “serious collateral damage” from the relationship, as one of its senior executives put it, and facing an unnecessary distraction. It also comes at a time when its current CEO Christian Sewing is trying to turn its fortunes around following some major losses.
While bank executives are not worried about Trump’s ability to repay the loans, given his personal guarantees and the time left before they become due, they also feel that it would be easier for them to seek the repayment if Trump is not in the office, the Reuters report added.
