According to Gadfly's
Lionel Laurent, Deutsche Bank AG (NYSE: DB) needs to
demonstrate a "show of strength" to the market and a visit with Qatar's royal family could accomplish such.
Laurent noted that Qatar's royal family is Deutsche Bank's largest active shareholder and if the bank can convince the royal
family to increase its stake, then it will "provide exactly that."
Related Link: Allianz
CIO Utermann: Deutsche Bank Is 'Too Important,' Says State Support Will Be Available
There may be one obstacle standing in Deutsche Bank's way: The stock has lost more than 50 percent since in 2016, which makes it
"hard to imagine any government will want to throw good money after bad."
Deutsche Bank could prove to be an exception as Laurent noted Deutsche Bank's Middle Eastern investors have shown a willingness
to throw "good money" in "the face of painful losses." for instance, Qatar's royal family increased their stake in the bank in
February to nearly 10 percent.
A fund controlled by Qatar's Sheikh Hamad bin Jassim bin Jabr Al Thani publicly backed Deutsche Bank's Chairman Paul
Achleitner.
A further investment by the Qatari family would give Deutsche Bank some much needed "breathing room to avoid quick-fix
solutions," such as selling some of its businesses. However, this time around the royal family's attitude towards the bank won't be
passive.
"If Qatar doesn't step up to the plate, other investors from elsewhere could be tempted," Laurent concluded. "Angela Merkel
isn't the only world leader with a stake in what happens to Deutsche Bank."
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.