It seems almost too easy at this point, but the data shows that everyone's favorite rally-having, not-so-subtly-xenophobic presidential candidate has a favorite bank... and it's probably exactly which one you thought it was.
While many big banks have shunned him, Deutsche Bank AG has been a steadfast financial backer of the Republican presidential candidate’s business interests. Since 1998, the bank has led or participated in loans of at least $2.5 billion to companies affiliated with Mr. Trump, according to a Wall Street Journal analysis of public records and people familiar with the matter.
That doesn’t include at least another $1 billion in loan commitments that Deutsche Bank made to Trump-affiliated entities.
But how did Deutsche Bank get so lucky to become President Trump's preferred lender?
Other Wall Street banks, after doing extensive business with Mr. Trump in the 1980s and 1990s, pulled back in part due to frustration with his business practices but also because he moved away from real-estate projects that required financing, according to bank officials. Citigroup Inc., J.P. Morgan Chase & Co. and Morgan Stanley are among the banks that don’t currently work with him.
At Goldman Sachs Group Inc., bankers “know better than to pitch” a Trump-related deal, said a former Goldman executive. Goldman officials say there is little overlap between its core investment-banking group and Mr. Trump’s businesses.
So why Deutsche?
Deutsche Bank’s relationship with Mr. Trump dates to the 1990s. The bank, eager to expand in the U.S. via commercial-real-estate lending, set out to woo big New York developers such as Mr. Trump and Harry Macklowe.
One of the bank’s first loans to Mr. Trump, in 1998, was $125 million to renovate the office building at 40 Wall Street. More deals soon followed, with the bank agreeing over the next few years to loan or help underwrite bonds worth a total of more than $1.3 billion for Trump entities.
By 2005, Deutsche Bank had emerged as one of Mr. Trump’s leading bankers. That year, the German bank and others lent a Trump entity $640 million to build the 92-story Trump International Hotel and Tower in Chicago. Deutsche Bank officials badly wanted the deal because it came with a $12.5 million fee attached, said a person familiar with the matter.
Well whatever got them there, The Donald and The Deutsche are in a relationship now and because President Trump is the greatest businessman who has ever lived, that relationship is THRIVING!
In 2008, Mr. Trump failed to pay $334 million he owed on the Chicago loan because of lackluster sales of the building’s units. He then sued Deutsche Bank. His argument was that the economic crisis constituted a “force majeure”—an unforeseen event such as war or natural disaster—that should excuse the repayment until conditions improved.
His lawyers were inspired to invoke the clause after hearing former Federal Reserve chairman Alan Greenspan describe the crisis as a “once-in-a-century credit tsunami,” according to a person who worked on the case for Mr. Trump.
Mr. Trump also attacked Deutsche Bank’s lending practices and said that as a big bank, it was partially responsible for causing the financial crisis. He sought $3 billion in damages.
Deutsche Bank in turn sued Mr. Trump, saying it was owed $40 million that the businessman had personally guaranteed in case his company was unable to repay the loan.
But in the world of Trump, that's like foreplay. We're sure that it all worked out...
Deutsche Bank argued that Mr. Trump had a cavalier history toward banks, quoting from his 2007 book, “Think Big And Kick Ass In Business And Life.”
“I figured it was the bank’s problem, not mine,” Mr. Trump wrote, according to the lawsuit. “What the hell did I care? I actually told one bank, ‘I told you you shouldn’t have loaned me that money. I told you that goddamn deal was no good.’”
The court rejected Mr. Trump’s arguments but the suit forced Deutsche Bank to the negotiating table. The two sides agreed to settle their suits out of court in 2009. The following year, they extended the original loan by five years. It was paid off in 2012—with the help of a loan from the German firm’s private bank.
While Deutsche Bank didn’t lose money on the deal, the fracas soured its investment bankers on working with Mr. Trump. “He was persona non grata after that,” said a banker who worked on the deal.
Looks like Deutsche Bank got tired of winning.