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Deutsche Bank gets Qatari commitment for more funds

The investment in Deutsche Bank is likely to be made through Qatar’s sovereign wealth fund. REUTERS/Ralph Orlowski/File Photo

Deutsche Bank AG has secured a commitment for additional investment from Qatar as the troubled German lender seeks to bolster its finances, according to people with knowledge of the matter. The investment is likely to be made through the Qatar Investment Authority, the country’s sovereign wealth fund, the people said, asking not to be identified.

Two other Qatari investment vehicles, controlled by members of the royal family and other prominent politicians, already own a stake.

While the discussions are at an advanced stage, no final deal has been reached, the people said.

The timing and the size of the investment are unclear. A Deutsche Bank spokesman declined comment.

Representatives for QIA didn’t respond to requests for comment.

The German government has been moving to fix Deutsche Bank as shares of the lender have slumped by almost half in the past year. The government is studying ways to make it easier for the lender to merge with Commerzbank AG, Bloomberg reported last month, while also considering other possibilities such as seeking fresh investment from existing or new shareholders.

Deutsche Bank, which has been trying to regain its footing after years of restructuring in the aftermath of the global financial crisis, faces broadening U.S. scrutiny as a leading Republican lawmaker joined Democratic colleagues in questioning the lender’s steps to combat money laundering amid reports that its U.S. unit may have been a key conduit for dirty cash.

QIA, which manages $320 billion, is known for its big-name investments and has purchased stakes in companies including Rosneft PJSC and Volkswagen AG.

QIA Chairman Sheikh Mohammed bin Abdel-Rahman Al-Thani suggested in an interview at the World Economic Forum in Davos that Deutsche Bank is among the major German companies the sovereign wealth fund is talking to about potential stake purchases.

QIA is looking “at different sectors” in Germany, said the chairman, who is also deputy prime minister and foreign minister of Qatar. “Financial services is among them,” as are infrastructure and industrials.

Many sovereign wealth funds have been “underweighting traditional financial stocks and moving into the fintech space, so this would be an interesting investment,” said Rachel Pether, an adviser at the Sovereign Wealth Fund Institute.

“The financial services industry holds a strategic importance in the development of a country’s economy, and given the strategic importance of Deutsche Bank to the German economy, this is perhaps as much a political decision as a financial one.”

Last year, Qatar said its projected investment of $11 billion in the German economy over the next five years would be its largest single investment in the country to date.

 
A version of this article appeared in the print edition of The Daily Star on January 28, 2019, on page 4.

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