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7 Oct, 2016 12:16

Germany's blue-chip firms rally behind Deutsche Bank

Germany's blue-chip firms rally behind Deutsche Bank

A number of Germany's biggest publicly traded companies are ready to provide capital for embattled Deutsche Bank, business daily Handelsblatt reported on Thursday. The bank may be forced to raise cash as it faces a $14 billion fine from US regulators.

The DAX index-listed corporations reportedly plan to buy Deutsche stock to boost its reserves. The company bosses discussed capital injections of low single-digit billions of euro, according to Handelsblatt, stressing that the government has welcomed the step.

“Market support for Deutsche Bank is in any case better than the use of state money,” Handelsblatt quoted people close to the matter as saying.

Germany's BDI business association and the finance ministry made no comment on the report.

At the same time, Germany's largest bank is currently negotiating the possibility of raising capital with securities firms, according to unnamed sources cited by Bloomberg. Top Wall Street firms are apparently discussing with Deutsche such options as a share sale and asset disposals to raise up to €5 billion ($5.6 billion).

The bank will reportedly reconsider selling its Deutsche Postbank unit or parts or all of its asset-management division. Deutsche Bank declined to comment.

READ MORE: Deutsche Bank shares touch fresh record lows as big clients flee

The lender is facing a $14 billion fine from the US Department of Justice over the alleged sale of toxic mortgage bonds before the global financial crisis of 2008.

Last week, Deutsche’s stock plunged to record intra-day lows below €10 per share. Having rebounded to nearly €12 ($13.53), the shares are still 13 percent lower than last month's peak and 46 percent below last year's level.