Deutsche Bank AG is looking to cut ties with President Trump amid negative publicity the bank garnered because of its relationship with the president.
Three senior banking officials told Reuters that the bank’s relationship with Trump soured, and the bank was considering options to distance itself from the White House. The Trump Organization currently owes Deutsche Bank roughly $340 million in outstanding loans against properties owned by Trump, according to paperwork the president filed to the U.S. Office of Government Ethics.
One official called the bad press “serious collateral damage” for the bank.
The three loans are personally guaranteed by the president and will begin to come due in two years. The loans were structured in a way that so far, Trump has only been paying the interest on the loans. Bank officials said the loans are “current on payments,” but as a result of the structuring, the entire principal is outstanding.
A management committee for the bank that oversees reputational risks has reportedly considered options for ridding the bank of the relationship. The bank has considered selling the loans, but the idea has not gained much support. Officials said it was unclear who would want to buy the loans “and the attended problems that come with it.”
If Trump does not win reelection, the bank has considered demanding repayment and foreclosing if he is unable to repay. The bank could seize Trump’s assets since the loans are personally guaranteed by him.
Last year, two Democratic-controlled House committees, the Committee on Financial Services and the Permanent Select Committee on Intelligence, subpoenaed Deutsche Bank and Capital One for Trump’s financial records. Trump sued the banks to thwart the subpoenas.
The New York Attorney General’s Office, led by Letitia James, opened an investigation into Trump’s relationship with Deutsche Bank in 2019 following testimony from former Trump lawyer and now convicted felon Michael Cohen. A New York district attorney is also seeking Trump’s financial information from Deutsche Bank.
In August of this year, Deutsche Bank announced it was starting an internal review of Rosemary Vrablic, Trump and Jared Kushner’s personal banker, regarding a 2013 real estate purchase she made. Deutsche Bank claims it was not aware of the transaction until contacted by the New York Times.
Deutsche Bank declined to comment for this story.
