Leaders of Germany's biggest companies rallied behind Deutsche Bank AG, saying in newspaper interviews that the lender now facing a hefty U.S. fine and a court fight in Italy is crucial for the country and its businesses in a globalized world.
In interviews with Frankfurter Allgemeine Sonntagszeitung, leaders of DAX corporations, including Daimler AG, Munich Re, Siemens AG and Deutsche Boerse AG, underscored that nationality still plays an important role when it comes to the choice of lenders.
"The German industry needs a German bank that accompanies us out into the world," BASF SE chairman Juergen Hambrecht told the newspaper. "The power games out there in the market aren't transparent, but they're there."
Deutsche Bank shares touched a record low last week after the U.S. Department of Justice in September requested $14-billion (U.S.) to settle a probe into the sale of mortgage-backed securities. The stock rebounded on Friday, jumping the most in almost six months after an Agence France Presse report said the lender was nearing a settlement of just $5.4-billion with the U.S. agency.
About 10 hedge funds that clear derivatives trades with the bank cut their exposure to Deutsche Bank last week. The lender has more than 800 hedge-fund clients.
The bank and the German government rejected reports a state bailout was being considered.
The week ended with a setback as the Frankfurt-based bank, one employee and five former managers were charged in Milan, along with ex-officials at Nomura Holdings Inc. and Banca Monte dei Paschi di Siena SpA, with helping to falsify the Italian bank's accounts.
For an exporting nation such as Germany, it would be bad if companies' only access to international capital markets was through banks based in other countries, EON AG chief Johannes Teyssen told the newspaper. It's important to have a global player like Deutsche Bank on one's side to succeed against international competitors, FAS cited RWE AG's Peter Terium as saying. Germany's strong economy needs a strong bank, Daimler CEO Dieter Zetsche said.
'Great Tradition' "Deutsche Bank has a great tradition, a solid base and, building on that, also a good future," the Daimler chief said. "I'm convinced of that."
At financial-services company Munich Re, CEO Nikolaus von Bomhard said the Deutsche Bank's latest troubles gave the reinsurer no reason to reduce the amount of business it does with the bank.
Siemens CEO Joe Kaeser said the bank's management had "our full trust" and was following the right goals. Echoing that vow of trust, BASF's Hamprecht said he just bought the stock. Travel company TUI AG joined the list, saying Deutsche Bank was a reliable partner.
FAS also reported that Deutsche Bank's CEO John Cryan is personally negotiating with the U.S. authorities. The bank's leadership will use a trip this week to an International Monetary Fund conference in Washington for further talks with the DOJ.
Deutsche Bank spokesman Ronald Weichert said executives every year travel to the IMF meeting. He declined to comment further.
In a separate report, Bild am Sonntag said that Deutsche Bank chairman Paul Achleithner called the office of Chancellor Angela Merkel about 11 p.m. on Sept. 15, to tell her that the bank would release a statement on the DOJ negotiations and the potential $14-billion fine. He also called Finance Minister Wolfgang Schaeuble to tell him of the release. The bank published the filing at 12:19 a.m. the next day.
The lender's shares closed Friday at 11.57 euros, up 6.4 per cent, the biggest gain since April. Agence France-Presse reported Friday that the lender is nearing a settlement over the fine with the DOJ, citing an unidentified person. A spokesman for the agency declined to comment when contacted by Bloomberg News.