Shares of Deutsche Bank struggled for gains during New York trade on Friday after a Dow Jones report, citing a source, that Germany’s government has ruled out support for the bank if it were to issue new stock.
The Dow Jones report cited a person who attended a closed-door briefing last week with a small group of lawmakers, aides to German Chancellor Angela Merkel, and senior Finance Ministry officials. It was “inconceivable for the state to take a stake in Deutsche Bank” if it were to issue new stock, the source said.
The Germany government has publicly said that it would not rescue Deutsche Bank, the country’s biggest bank. Deutsche Bank says that it hasn’t asked for government help and it does not need a capital raise.
The German government and Deutsche Bank both declined to comment to Dow Jones, the report said.
The U.S.-traded shares of Deutsche Bank were slightly higher on Friday, after temporarily slipping into negative territory earlier in the session.
Deutsche Bank came under scrutiny in mid-September when it surfaced that the U.S. Department of Justice was demanding $14 billion to settle with the bank over its mortgage lending activities before the recession. The bank’s shares hit record lows in New York trade at the end of September but have since recovered amid hopes of a lower settlement figure.
The bank and analysts generally expect the final settlement figure to be far lower than initial reports.
As of June 30, Deutsche Bank said it had 5.5 billion euros ($6.17 billion) in litigation reserves, according to a presentation the bank gave during quarterly earnings.
Source: CNBC
