Qatari Fund Rumors Extend Another Lifeline To Deutsche Bank

Beleaguered Deutsche Bank AG (USA) DB may be getting another lifeline, as Qatari investors owning the largest stake in the bank are unlikely to throw in the towel as yet.

There was trouble in the paradise of Deutsche Bank when the Wall Street Journal reported that the U.S. Justice Department was seeking $14 billion in fine to settle accusations regarding mis-selling mortgage backed securities in the United States. This news sent the stock tumbling before it recovered some of the lost ground on the news that the German banking giant has struck a settlement deed at a much lower amount.

Now, a Reuters exclusive report suggested that funds controlled by Qatari Prime Minister Sheikh Hamad bin Jassim al-Thani, which have nearly a 10 percent stake, signaled that they would stand by the bank.

Related Link: Qatar Unlikely To Raise Stake In Deutsche Bank To 25% -Reuters

An unnamed Qatari source, who is close to Sheikh Hamad's office but was not involved in the Qataris' internal discussions about Deutsche Bank, said, "Purchasing more stock — that could be considered [...] which is not to say there are any imminent plans to do that."

The Reuters report also quoted a second source as saying, "This is a long-term investment. Qatar believes it will all work out well for the bank in the end."

They would also want to take part in any capital raising plan if warranted as they would want to maintain their current stake, according to the report. In return for continued patronage, the Qatari fund may want the bank to refocus on its daily business in a bid to maintain market share in key businesses such as investment banking.

The source also ruled out any pressure from the funds to affect a management change, as they are more focused on execution than strategy.

At the time of writing, Deutsche Bank shares were up 0.30 percent at $13.57.

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