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Germany denies preparing to rescue Deutsche Bank

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The German government denied that it was working on a rescue of Deutsche Bank after a newspaper report about such plans fuelled fears over the future of the biggest lender in Europe’s largest economy.

European Central Bank president Mario Draghi said that the bank’s low interest rate policies were not to blame for the German group’s problems but declined to comment on whether the state should step in to help.

Deutsche is fighting a fine of up to $14 billion (£10.80 billion) from the US Department of Justice and concerns over its stability had pushed shares to a record low on Tuesday.

Faced with a costly bill for litigation, Deutsche is getting rid of non-core businesses and said on Wednesday it had sold its British insurance business Abbey Life in a $1.2 billion (£0.93 billion) deal.

The German finance ministry moved swiftly to dismiss a report that a rescue plan was being prepared in case Deutsche was unable to raise capital to pay legal bills which include cases dating back to its expansion before the financial crisis.

Paul

The author Paul