Tuesday, January 12, 2021
Divorce from the problem customer
Why Deutsche Bank is leaving Trump
From Jan Gänger
Deutsche Bank had long wanted to end its business relationship with Donald Trump. With the unpleasant end of the presidency, the money house now ushers in the farewell.
A not particularly happy relationship comes to an end: Deutsche Bank is breaking up with Donald Trump. But as is the case with many divorces, Zoff threatens after the separation.
The bank, which does not comment on the separation reports from various US media, has reportedly wanted to end its business relationship with Trump for some time. And with the end of the presidency, the opportunity now seems to have come.
Germany's largest bank is one of the last financial institutions to be loyal to Trump. When others had long since waved it off, she continued to lend him money. In the 18 years until the start of the presidency in 2016, it should have been around $ 2 billion. This makes Deutsche Bank Trump's largest lender.
In the next four years, according to the New York Times, the bank's loans in the amount of more than 300 million dollars will fall due – claims for which Trump is personally liable, according to the newspaper, not his corporate network. Overall, Trump is responsible for $ 421 million in debt. Meanwhile, it is completely unclear whether Trump is actually worth billions of dollars, as he claims.
The reason for the now apparently planned separation is possibly the violent intrusion of Trump supporters into the Capitol in Washington. The US boss of Deutsche Bank, Christiana Riley, had clearly criticized the action. "We take pride in our constitution and stand by those who try to uphold it to ensure that the will of the people is respected and that there is a peaceful transfer of power," said Riley.
Banker files notice
In the past year, various media reported that the bank was looking for ways to end its business relationship with Trump after the presidential election. The Trump Organization owns several hotels and golf clubs. The separation indicated when the Deutsche Bank employee, who has been responsible for Trump for years, submitted her resignation in December. According to the bank, one of her long-term colleagues is also leaving the institute. However, she did not give a reason for the steps.
Rosemary Vrablic had brought Trump to Deutsche Bank and was his contact person there. According to the New York Times, she had ensured that Trump's corporate network received loans amounting to several hundred million dollars. In August, Deutsche Bank then initiated an internal investigation into a dubious real estate deal from 2013 between Vrablic and her employee with a company that is partly owned by Trump's son-in-law Jared Kushner.
The bank is tired of making headlines again and again because of Trump, Reuters reported last November, citing three high-ranking managers. A management committee that deals with reputational risks, among other things, has discussed various options to end the relationship. One proposal was to resell the loans granted to Trump. But nothing came of it, among other things because it was unclear who would buy the loan at all.
Trump has been a Deutsche Bank customer for more than two decades. The loans, which were granted for a golf course in Miami and hotels in Washington and Chicago, are designed in such a way that the Trump Organization has so far only had to pay interest, it said. The loan is repaid completely at the end of the term. The loans mature in 2023 and 2024. The problem: The hotels and golf clubs financed with the loan are suffering from the Corona crisis, and income has collapsed, as in the entire tourism industry. Trump had also planned to build hotels and houses on golf courses like the one in Miami, and thus generate additional income. But so far nothing has come of it.
Donate for debt settlement?
Deutsche Bank is not too worried about the remaining time until the loans and Trump's personal guarantee are due, as it was said. Managers would still have run through various scenarios. If Trump is no longer president, it will be easier to insist on the repayment of the loans and even to initiate foreclosure if Trump cannot repay or refinance the loans. If Trump had won the election, things would look different. It would have been unthinkable to confiscate the assets of an incumbent US president.
Trump has also raised around $ 200 million in donations in the past few weeks. The official reason: This was intended to finance lawsuits against Joe Biden's election victory. But he can also use all that money in a completely different way – for example to pay off debt.
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