Donald Trump has been a Deutsche Bank customer for over 20 years. But the US president keeps making negative headlines for the money house. A loss in the presidential election is said to help initiate loan repayment or foreclosure.
According to insiders, Deutsche Bank is looking for a way to end its business relationship with US President Donald Trump. The bank is tired of making the headlines over and over again, said three high-ranking executives from Reuters news agency. In the past few months, a management committee that deals with reputational risks, among other things, has discussed various options.
One proposal was to resell the loans granted to Trump in order to end business relationships with the real estate mogul. But this proposal did not catch on, among other things because it was unclear who would buy the loan, said one of the insiders. Deutsche Bank and the White House declined to comment. There was also no comment from Trump's family company, the Trump Organization.
Deutsche Bank is one of Trump's major lenders. The institute currently has around $ 340 million in loans to its family business Trump Organization, as an insider said. This magnitude is also evident from documents that Trump submitted to the Office of Government Ethics in July. There is no default in payment for the three loans due in 2023, and Trump has personally guaranteed their repayment, said two insiders.
Customer for two decades
The real estate mogul has been a Deutsche Bank customer for over two decades. Trump has received more than two billion dollars in loans since the late 1990s, said one of the insiders. The prominent borrower has brought the money house many negative headlines. Time and again, the Democrats in the US Congress demanded information about the dealings with the Republican President, who rejected them with reference to the legal situation.
The Democratic Senator Elizabeth Warren, who has been targeting Deutsche Bank for many years for possible money laundering violations, does not give up and wants to continue campaigning for a committee of inquiry in Congress. "I'll keep fighting. You bet that," Warren told Reuters. Banking laws need to be enforced, especially for giant institutions like Deutsche Bank.
How the Trump saga continues will depend largely on the outcome of the US elections. Should Trump lose and the Democrats control the White House and Congress, the investigation into Trump's finances should pick up pace. In such a situation, Deutsche Bank would also have more freedom to tackle the loan issue and end its business relationship with Trump, said the insiders. The bank hopes to get something out of the firing line of the investigation.
More wiggle room if Biden wins
The loans, which were granted for Trump's 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, said two of the insiders. The loan is repaid completely at the end of the term. The loans will mature in 2023 and 2024, as documents show. 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.
Deutsche Bank is not too worried about the remaining time to maturity of the loans and Trump's personal guarantee, the three insiders said. But managers would have worked out different scenarios. If Trump is no longer president, Deutsche Bank believes it would be easier to insist on repaying the loan, to initiate foreclosure if Trump cannot repay or refinance the loan, or to sell it, two of the insiders said.
With Trump personally vouching for the loans, his assets could be confiscated if he cannot repay them. Should Trump be re-elected, the bank would have fewer options, said the three insiders. In that case, the loans would likely be extended until the end of Trump's tenure. In any case, it seems unthinkable to seize the assets of an incumbent US president – the public outcry would be enormous.
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