The German government has denied claims that they are working on a rescue plan for Deutsche Bank (ETR:DBK), in case it cannot pay the $14 billion fine issued by the US Department of Justice.
German paper Die Zeit reported that the German government were creating a rescue plan for the bank, after shares fell to a record low on Thursday in the face of costly litigation dating back to the 2008 financial crisis.
In a statement, the finance ministry said the report was “wrong”, adding that “the German government is not preparing any rescue plan, there is no reason to speculate on such plans.”
The fine from the US Department of Justice was imposed earlier this month, sending banking shares down across the board as investors worried others may receive a fine of a similar figure. The fine relates to Deutsche Bank’s involvement in the mis-selling of sub-prime mortgages before 2008.
The bank have said they will not pay the $14 billion figure given by the Department of Justice, saying in a statement on the 16th September that “the negotiations are only just beginning.”
“Deutsche Bank has no intent to settle these potential civil claims anywhere near the number cited. The bank expects that they will lead to an outcome similar to those of peer banks which have settled at materially lower amounts,” it continued.
The bank have been looking at ways to save money as margins continue to squeeze. It recently announced the sale of its British insurance business Abbey Life to Phoenix in a deal worth $1.2 billion deal. It has also divested of its stake in Chinese lender Huaxia, as well as cutting jobs from its 100,000 strong workforce, revamping information technology and shrinking non-core assets.
Deutsche Bank shares have lost almost half of their value this year, trading at a low of 10.22 on Tuesday but have since risen to 10.84 (1549GMT).