Exclusive: Tired of Trump, Deutsche Bank games ways to sever ties with the president – sources

In this news, we discuss the Exclusive: Tired of Trump, Deutsche Bank games ways to sever ties with the president – sources.

NEW YORK / FRANKFURT (Reuters) – Deutsche Bank AG is looking for ways to end its relationship with President Donald Trump after the U.S. election as it grows weary of the negative publicity flowing from the relationship, three senior officials say. bank with direct knowledge of the matter.

Deutsche Bank has around $ 340 million in loans outstanding to the Trump Organization, the president’s umbrella group that is currently overseen by his two sons, according to documents filed by Trump with the US Bureau of Government Ethics in July. and a primary source within the bank. The three loans, which are against Trump’s properties and begin to mature in two years, are up-to-date on payments and personally guaranteed by the president, according to two bank officials.

In meetings in recent months, a Deutsche Bank executive committee that oversees reputational and other risks to the lender in the Americas region has discussed ways to rid the bank of these last vestiges of the relationship, said two of the three bank officials. The bank has loaned Trump more than $ 2 billion over the years, one of the officials said.

An idea that came out of the meetings: to sell the loans on the secondary market, two bank officials said. But one official said the idea has not gained traction, in part because it’s unclear who would want to buy the loans and the problems that come with it.

While it was known that Deutsche Bank had taken a close look at its relationship with Trump, notably by creating a task force in 2016 to review the bank’s relationship with him, its recent desire to end all ties and the outlines of talks in light of the election have not been reported before.

Deutsche Bank declined to comment. The Trump Organization did not respond to requests for comment. The White House declined to comment.

WARREN WARNING

The German bank, which began lending to Trump in the late 1990s, has been embroiled in congressional and other inquiries into the finances of the real estate mogul-turned-politician and alleged relations with Russia.

Polls and bad press, viewed by a senior executive as “serious collateral damage” to the relationship, are an unwanted distraction for the bank, the three officials said. It comes at a time when chief executive Christian Sewing is trying to turn around Deutsche Bank after its decades of becoming a big Wall Street bank left it with huge losses.

Elizabeth Warren, a Democratic member of the Senate Banking Committee, has previously called for an investigation of Deutsche Bank into its money laundering controls and demanded responses from the lender on its relationship with Trump and his family. She told Reuters that she intends to continue pushing for an investigation into the next administration.

“You bet that I will continue to fight for accountability and rigorous enforcement of our banking laws, especially for giant institutions like Deutsche Bank,” she said.

What happens next for the bank will depend on the outcome of Tuesday’s election, according to the three bank officials.

If the Republican president loses and Democrats take control of the White House and Congress, Deutsche Bank executives believe congressional inquiries that stalled amid a court battle over access to financial records of Trump could be rejuvenated, the three bank officials said.

In this scenario, however, Deutsche Bank executives believe they will also have more freedom to manage loans and end their relationship with Trump, officials said. They hope it might help reduce some of the scrutiny, they said.

DIFFERENT SCENARIOS

The loans, which are against Trump’s golf course in Miami, and hotels in Washington and Chicago, are such that the Trump organization has only had to pay interest on them so far, and all of the principal is unpaid, two of the bank’s three officials said. . They expire in 2023 and 2024, depending on deposits.

Businesses that back loans face challenges. The economic downturn from coronaviruses has hit the travel industry, including hotels. Additionally, last month Reuters reported that Trump’s plan to make money by developing homes and hotels on his golf courses, including the one involving the Deutsche Bank loan, had failed. still materialized.

Deutsche Bank executives are not unduly concerned about Trump’s ability to repay the loans, given the president’s personal guarantees and the time remaining before they expire, the three bank officials said.

If Trump is not in power, Deutsche Bank executives believe it would be easier for them to demand repayment, seize if he is unable to repay or refinance, or trying to sell the loans, according to two of the bank’s three officials. .

Since Trump has personally guaranteed all the loans, Deutsche Bank could also seize the president’s assets if he is unable to repay, two of the bank’s three officials said.

If Trump wins a second term, Deutsche Bank executives believe their options would be fewer, the bank’s three officials said. The bank wouldn’t want the negative publicity inherent in foreclosing on the assets of a sitting president and would likely extend loans until he is removed from office, two bank officials said.

Ultimately, the three bank officials said, the issue will not be resolved until well after the election.

Edited by Rachel Armstrong; Paritosh Bansal and Edward Tobin

Original © Thomson Reuters

Originally posted 2020-11-03 03:56:12.

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