Qatari investors won’t sell largest stake in Deutsche Bank, but could buy more instead.
A source close to the Qatar’s former Prime Minister Sheikh Hamad bin Jassim al-Thani’s office told Reuters that he expects the Qataris to stand by Deutsche Bank, and might even consider to invest more is the bank decides to raise capital.
In 2014, funds controlled by Sheikh Hamad bin Jassim al-Thani bought 6.1 percent of Deutsche Bank, only to raise their stake to 10% in July, earlier this year. The stocks were bought by Paramount Services Holdings and Supreme Universal Holdings, two investment firms said to be owned by the Qatari ruling family.
Germany’s biggest bank has been engulfed in a dispute with the U.S. Department of Justice for about a month now, who are demanding up to $14 billion in settlements to claims about alleged missold U.S. mortgage-backed securities before the financial crisis. However, the source believes that Qatar will stand by their German partners.
Deutsche are fighting the claims, but might have to turn to investors for funding if the fine is imposed.
Last Friday, Deutsche Bank shares hit a record intra-day low, plunging to below 10 euros. Even though they have rebounded to just above 12 euros, they are still about 46% below their close at the end of 2015.
This means that the Qataris may have lost well above $1.2 billion with their investment in the bank. Still, a second source told Reuters 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”, he said.