Qatar has been feeling out Germany’s financial regulator, BaFin, regarding a possible investment in Deutsche Bank by the emirate’s sovereign wealth fund, the Qatar Investment Authority, according to sources at the Doha Forum last weekend.
BaFin declined to comment and the QIA did not respond to a request for comment. The Qatar Financial Center, which sponsored the forum in the emirate, said speculation of a further investment was based on unfounded assumptions and not on facts. The commitment was meant for "the German market and not as part of an investment into any specific German institution," a statement read.
Rumors of a further Qatari investment in Germany’s largest bank first emerged when the head of Qatar Financial Center, Yousuf Mohamed al-Jaida, told Handelsblatt: “We will be investing in a large financial institution in Germany.”
Al-Jaida declined to name the lender, but said it is a bank that Qatar already has a stake in. The only top German banking executive attending the forum was Deutsche Bank CEO Christian Sewing.
EU review looms
The ruling Al-Thani family in Qatar already owns 6.1 percent of Deutsche Bank through two funds, Paramount Services Holdings and Supreme Universal Holdings, and combined with derivatives holdings, controls just short of 10 percent of the shareholder vote, according to insiders.
A further Qatari investment would invoke the euro-zone regulation that requires a shareholder who owns more than 10 percent of a bank be subject to enhanced disclosure and review. That could even result in a negative verdict if the shareholder is deemed unstable or unreliable.
If EU regulators determined that the two funds and the QIA would coordinate their votes, they would likely be considered a single shareholder subject to the review. This is something the Qataris would like to avoid.
The Qatari interest comes at a difficult time for Deutsche Bank, whose share price hit new lows amid a high-profile investigation over money laundering. The bank’s US unit acted as a correspondent bank for a bulk of the €200 billion ($227 billion) in illegal funds laundered through Denmark’s Danske Bank’s Estonian branch.
And German authorities are probing tax evasion and money laundering in a former Virgin Islands unit of Deutsche, as disclosed in the Panama Papers.
Deutsche Bank’s fluctuating fortunes has also led to some comings and goings among its major shareholders. Chinese conglomerate HNA took a 7.6 percent stake last year as it rapidly expanded its global holdings. Now it is retrenching and announced plans to sell the stake, which massively declined in value.
US hedge fund Hudson Executive acquired a 3.1 percent stake earlier this fall, which temporarily bolstered investor confidence in the beleaguered lender. Soon after, new rumors of a merger between Deutsche and Germany’s No. 2 private sector bank, Commerzbank, facilitated by the government, briefly made the rounds.