Deutsche Bank has cut ties to one of Europe’s most successful property developers over concerns about his involvement in a sprawling corruption investigation.
Germany’s biggest lender decided late last year to end its business relationship with René Benko, the Austrian real estate billionaire who co-owns Selfridges in London, the Chrysler Building in New York and German department store, KaDeWe, according to three people with close knowledge of Benko’s financial affairs.
The only banking relationship Deutsche has retained with Benko’s €24bn property empire is with German department store Galeria Kaufhof, which filed for bankruptcy protection in October, the people said.
“The writing was on the wall,” said one person close to Benko’s property business, Signa Group.
In October, Benko was named by prosecutors as a suspect in a long-running corruption investigation in Austria that has ensnared prominent businessmen and politicians. The probe led to the resignation of the country’s chancellor Sebastian Kurz, a key ally of Benko, in 2021.
Benko’s involvement in the case became public after police raided Signa’s headquarters in Innsbruck.
No charges have been made against Signa Group or Benko, and both have denied any wrongdoing in relation to the investigation.
Some of the individuals named in the probe have privately accused prosecutors of targeting figures close to Austria’s ruling conservative People’s party for political reasons.
Benko was cleared of wrongdoing in a separate bribery probe against him and other property developers last month.
Deutsche Bank said it did “not comment on actual or potential client relationships”.
A lawyer for Signa Group said that the company had “no existing loans, no credit business or investment banking business with Deutsche Bank and is not in talks with Deutsche Bank about this”. Deutsche Bank was not the group’s principal bank, he added.
Deutsche Bank has nevertheless provided commercial services to Signa entities in the past and has played a role in helping to advise and finance the group. Deutsche was the joint bookrunner for a $300mn green bond issued by Signa in 2021, for example, and provided banking services to Benko personally.
The bank is believed to have kept Galeria Kaufhof as a client because it judged it would be politically difficult to break ties with Germany’s largest department store chain in the middle of a restructuring, people familiar with the details said.
The move to sever ties with Benko comes as Deutsche Bank seeks to reduce its exposure to clients that might come with reputational risk.
Last year, it ditched Hertha Berlin as a client over the Bundesliga football club’s links to financier Lars Windhorst, after the Financial Times reported that Windhorst was under investigation for potential violations of the country’s banking act.
Windhorst and Hertha Berlin declined to comment.