If the embattled German bank, Deutsche Bank, decides to raise capital Qatari investors who own the largest stake in Deutsche Bank do not plan to sell their shares and could consider buying more, reported Reuters.
Qatar controlled funds increased their stake to just under 10 percent, including options, in July this year after the funds controlled the country’s former Prime Minister Sheikh Hamad bin Jassim al-Thani bought 6.1 percent of Deutsche in mid-2014.
After the U.S. Department of Justice demanded up to $14 billion to settle claims that the bank missold U.S. mortgage-backed securities before the financial crisis, Germany's biggest bank has been engulfed by a crisis of confidence since last month. If the fines is imposed in full the bank may have to turn to investors for more money even as it is fighting the fine.
Deutsche shares are 13 percent below last month's peak and 46 percent below their close at the end of last year and plunged to record intra-day lows below 10 euros last week on Friday.
That translates to a potential loss of over $1.2 billion on their investments in the bank by the Qataris at least on paper.
But since it is expected that Sheikh Hamad would stand by the bank¸ he was not involved in the Qataris' internal discussions about Deutsche, a Qatari source, who is close to Sheikh Hamad's office reportedly told Reuters.
"Purchasing more stock - that could be considered ... which is not to say there are any imminent plans to do that," said the source, declining to be named as the matter is confidential.
Officials in Sheikh Hamad's office did not immediately comment, while Deutsche declined to comment.
Reuters quoted a second source who said that the Qataris had no intention of selling out. "This is a long-term investment. Qatar believes it will all work out well for the bank in the end."
If a capital hike does turn out to be required, "they would probably take part in it as they want to keep their roughly 10 percent stake. But they want to stay below the 10 percent threshold" for regulatory reasons, the source added.
There is stricter public disclosure rules imposed on any investor owning a stake of more than 10 percent in a listed German company.
He was not aware of any formal correspondence between Sheikh Hamad's investment vehicles -Paramount Services Holdings and Supreme Universal Holdings - and Deutsche's management, since the U.S. Department of Justice's claim in September, the first source also told Reuters.
Conditions that the bank does not lose more market share in key businesses such as investment banking and resumed focusing on its daily business, would decide Qatar's continued involvement in the bank, the second source reportedly told Reuterrs.
"They are too much focused on legal issues, the whole bank is ruled by lawyers at the moment. This needs to be changed."
A string of paper losses on high-profile portfolio investments in recent years, including a stake in Germany’s Volkswagen, which is facing fallout from a damaging emissions scandal, have been faced by Qatar's ruling family and the Qatar Investment Authority (QIA), the country's sovereign wealth fund.
(Source:www.reuters.com)
Qatar controlled funds increased their stake to just under 10 percent, including options, in July this year after the funds controlled the country’s former Prime Minister Sheikh Hamad bin Jassim al-Thani bought 6.1 percent of Deutsche in mid-2014.
After the U.S. Department of Justice demanded up to $14 billion to settle claims that the bank missold U.S. mortgage-backed securities before the financial crisis, Germany's biggest bank has been engulfed by a crisis of confidence since last month. If the fines is imposed in full the bank may have to turn to investors for more money even as it is fighting the fine.
Deutsche shares are 13 percent below last month's peak and 46 percent below their close at the end of last year and plunged to record intra-day lows below 10 euros last week on Friday.
That translates to a potential loss of over $1.2 billion on their investments in the bank by the Qataris at least on paper.
But since it is expected that Sheikh Hamad would stand by the bank¸ he was not involved in the Qataris' internal discussions about Deutsche, a Qatari source, who is close to Sheikh Hamad's office reportedly told Reuters.
"Purchasing more stock - that could be considered ... which is not to say there are any imminent plans to do that," said the source, declining to be named as the matter is confidential.
Officials in Sheikh Hamad's office did not immediately comment, while Deutsche declined to comment.
Reuters quoted a second source who said that the Qataris had no intention of selling out. "This is a long-term investment. Qatar believes it will all work out well for the bank in the end."
If a capital hike does turn out to be required, "they would probably take part in it as they want to keep their roughly 10 percent stake. But they want to stay below the 10 percent threshold" for regulatory reasons, the source added.
There is stricter public disclosure rules imposed on any investor owning a stake of more than 10 percent in a listed German company.
He was not aware of any formal correspondence between Sheikh Hamad's investment vehicles -Paramount Services Holdings and Supreme Universal Holdings - and Deutsche's management, since the U.S. Department of Justice's claim in September, the first source also told Reuters.
Conditions that the bank does not lose more market share in key businesses such as investment banking and resumed focusing on its daily business, would decide Qatar's continued involvement in the bank, the second source reportedly told Reuterrs.
"They are too much focused on legal issues, the whole bank is ruled by lawyers at the moment. This needs to be changed."
A string of paper losses on high-profile portfolio investments in recent years, including a stake in Germany’s Volkswagen, which is facing fallout from a damaging emissions scandal, have been faced by Qatar's ruling family and the Qatar Investment Authority (QIA), the country's sovereign wealth fund.
(Source:www.reuters.com)
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