Dubai - Deutsche Bank is taking e1.75 billion (R24.5bn) of Qatari funds to shore up capital, joining banks from Barclays to Credit Suisse courting the richest nation during times of need.
Paramount Holdings Services, an investment vehicle owned and controlled by former Qatari prime minister Sheikh Hamad bin Jassim bin Jabr al Thani, had agreed to buy 60 million Deutsche Bank shares at e29.20 apiece, the bank said on Sunday. The Frankfurt-based lender also said it planned to raise an additional e6.3bn in a rights issue.
Germany’s largest bank, which at the end of last year held less capital than all but two of the nine biggest European and US investment banks, is reprising a crisis-era trend of banks tapping Persian Gulf investors for equity injections to repair balance sheets. It also marks the second deal in less than a month for Sheikh Hamad, who helped oversee a series of high-profile transactions for Qatar as head of its sovereign wealth fund.
“I see this as a financial investment as the balance sheets of these banks are a lot more healthy today,” Vikas Papriwal, the head of sovereign wealth funds at KPMG in Dubai, said yesterday. “Deutsche Bank is a very powerful brand and has global reach as well as a good regional presence.”
Qatar, the wealthiest country on a per capita basis, invested billions in emergency fundraising by Barclays in 2008, becoming the London-based bank’s second-largest shareholder in the process. It is also Credit Suisse’s second-biggest holder after the bank raised Sf10 billion (R115.9bn) from investors in Qatar, Israel and Saudi Arabia in 2008.
Qatar is buying Deutsche Bank shares at a 5 percent discount to the Friday closing price in Germany. No further details of the transaction were provided in the release.
The stock fell 1.6 percent to e30.26 at 11.17am in Frankfurt trading yesterday, and is down about 13 percent this year.
Qatar, which has the third-largest gas reserves, is snapping up assets across the globe as it seeks to reduce its energy dependency. The country’s economy is set to expand 5.5 percent this year, economists predict. – Bloomberg