German business leaders lined up to defend Deutsche Bank, the country’s biggest lender, after reports said it would have to pay billions of dollars to settle a US Department of Justice investigation.
The heads of companies, including BASF, Daimler, and Siemens spoke out in a front-page article in the German news outlet, Frankfurter Allgemeine Sonntagszeitung.
“We stand with Deutsche Bank. German industry needs a Deutsche Bank to accompany us out into the world,” said BASF chairman Juergen Hambrecht, according to a report on the BBC News website.
Nikolaus von Bomhard, the chief executive of Munich Re, the reinsurance giant, said he saw no need to “reduce our business volume” with Deutsche Bank, while Siemens boss Joe Kaeser said that the bank’s management “is pursuing the right goals and has our fullest confidence.”
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.”
The German bank’s shares have been on wild ride. On Friday, the stock dropped more than 8% to below €10 at the market open, as investors took fright at reports that hedge funds are reducing their exposure to the bank.
According to press reports, the funds cut their ties with Deutsche Bank after US authorities demanded a fine of up to $14 billion (£10.8 billion, €12.4 billion) for mis-selling mortgage-backed securities before the 2008 financial crisis, which would threaten its future.
Agence-France Presse reported late on Friday that Deutsche and the US Department of Justice were close to agreeing a settlement of $5.4 billion — much lower than the $14 billion expected — and Deutsche’s stock price rose more than 15%.