Deutsche Bank sends stark warning to European companies borrowing US lenders

Germany’s Deutsche Bank has a sent a stark warning to European companies borrowing from US lenders, stressing that they (the lenders) are not reliable.

The warn was spely out but the Deutsche Bank board member Fabrizio Campelli.

The warning remains the latest escalation in a battle with US banks for the business of European firms on its home turf.

It comes at a time that the corporate banking unit of Germany’s largest lender is seeing a resurgence in the home stretch of an extensive restructuring.

“A number of European corporates are already realising the risks of not operating with companies that are long-term committed to the geographies … in which they operate,” he said, without citing any examples.

Campelli, who oversees Deutsche’s corporate division as well as the investment bank that powered Deutsche through the overhaul, said US banks “tend to flex lending up and down depending on circumstances”.

“There was evidence of non-German banks in this country taking lending off the table while German banks were going longer-credit during the pandemic, in 2020,” he added, again without citing examples.

According to a report, last year, five of the largest US banks – JPMorgan, Bank of America, Morgan Stanley, Goldman Sachs and Citigroup – captured a combined 35% share of the revenue for loans by German companies, up from 18% a decade earlier, data from Dealogic compiled for Reuters show.

Deutsche Bank Chief Executive Christian Sewing recently warned of the “danger” of European reliance on foreign banks, equating the threat to the region’s dependence on outsiders for energy.

Deutsche Bank has long highlighted a need for Europe to have strong banks to vie with US and Chinese competitors, but the latest rhetoric signals a more aggressive tone.

Campelli called for a “concerted approach” by politicians and regulators to support European banks.