Deutsche Bank, the German lender that has been one of the main financiers of former President Donald Trump’s business empire, has faced intense scrutiny over its relationship with the controversial real estate mogul. A recent civil fraud trial in New York has revealed new details about how the bank pursued Trump’s business despite multiple warning signs and legal disputes.
The “whale hunting” strategy
One of the key witnesses in the trial, which is brought by New York Attorney General Letitia James, is Rosemary Vrablic, a former Deutsche Bank executive who was instrumental in securing loans for Trump and his company, The Trump Organization. Vrablic testified that she saw Trump as a potential “whale”, a term used by bankers to describe a big and lucrative client.
In a 2011 email, Vrablic wrote to her superiors: “We are whale hunting.” She was referring to her efforts to bring in Trump’s business, which included a $100 million loan for his Doral golf resort in Florida. Vrablic said she was motivated by the prospect of earning fees and commissions from the deal, as well as boosting her reputation within the bank.
Vrablic also admitted that she did not conduct a thorough due diligence on Trump and his company, relying instead on his personal guarantee and the value of his properties. She said she was not aware of Trump’s history of defaults and lawsuits with other lenders, including Deutsche Bank itself.
The troubled relationship
Deutsche Bank’s relationship with Trump dates back to 1998, when it loaned him around $425 million to finance renovations of a tower at 40 Wall Street and the construction of a skyscraper next to the United Nations. Since then, the bank has lent Trump and his company more than $2.5 billion, according to a Reuters report citing bank officials and filings made to the U.S. Office of Government Ethics.
However, the relationship has been fraught with problems and controversies. In 2003, Deutsche Bank helped Trump’s casino company sell hundreds of millions of dollars in bonds, but Trump’s company defaulted in 2004, leaving the bank’s clients with losses. Trump also sued the bank’s real estate division in 2008 after defaulting on a $40 million repayment that funded the construction of the Trump International Hotel and Tower in Chicago.
Despite these disputes, the bank continued to do business with Trump, mainly through its private banking division, which catered to wealthy individuals and families. Vrablic was the main point of contact for Trump in this division, and she approved several loans for him and his company, including a $170 million loan for his Washington hotel and a $150 million loan for his Chicago tower.
The fallout from the Capitol riot
The relationship between Deutsche Bank and Trump came under renewed scrutiny after the deadly riot at the U.S. Capitol on January 6, 2023, which Trump is accused of inciting. The bank faced pressure from lawmakers, regulators, and activists to cut ties with Trump and his company, which were already facing financial and legal challenges.
According to The New York Times and CNN, Deutsche Bank decided to stop doing business with Trump and his company, ending a two-decade relationship that had become a liability for the bank. The bank declined to comment on the reports, but sources familiar with the bank’s thinking said the decision was made in the wake of the Capitol riot.
The bank currently has around $340 million in loans outstanding to the Trump Organization, which are due in 2023 and 2024. The loans are secured by Trump’s golf course in Miami and hotels in Washington and Chicago. The bank’s executives believe Trump can repay the loans, given his personal guarantee and the time left before they come due. However, if he fails to do so, the bank could foreclose on the properties or demand refinancing.
Deutsche Bank is not the only financial institution to distance itself from Trump after the Capitol riot. Signature Bank, the New York lender that served Trump’s family, also announced that it would close two personal accounts in which Trump held about $5.3 million. The bank also called for Trump’s resignation as president, saying he had “failed to uphold his oath to protect and defend the Constitution.”
