Deutsche Bank has severed its ties with René Benko, a prominent property developer in Europe, due to concerns surrounding his involvement in an extensive corruption investigation. The decision to terminate the business relationship was made by Germany’s largest lender late last year. Benko, an Austrian real estate billionaire known for co-owning Selfridges in London, the Chrysler Building in New York, and the German department store KaDeWe, maintains a banking connection with Deutsche Bank solely through the German department store Galeria Kaufhof. The store had filed for bankruptcy protection in October. This move by Deutsche Bank aligns with its efforts to minimize exposure to clients that could pose reputational risks.
The decision to sever ties with Benko followed his implication as a suspect in a long-standing corruption probe in Austria. The investigation has ensnared prominent figures from the business and political sectors, leading to the resignation of Austria’s chancellor Sebastian Kurz, a close associate of Benko, in 2021. Benko’s connection to the case became public when police conducted a raid on Signa’s headquarters in Innsbruck. It’s worth noting that neither Signa Group nor Benko have faced any charges in relation to the investigation and have denied any wrongdoing.
Although Deutsche Bank has provided commercial services to Signa entities in the past, including advisory and financing support, a lawyer for Signa clarified that there are currently no existing loans, credit business, or investment banking interactions between the company and Deutsche Bank. Moreover, Deutsche Bank has been Galeria Kaufhof’s principal bank due to the political sensitivity of severing ties with Germany’s largest department store chain during an ongoing restructuring.
Deutsche Bank’s decision to end its association with Benko is in line with its strategic objective of reducing exposure to clients that could carry potential reputational risks. This follows a similar move last year when the bank terminated its relationship with Hertha Berlin, a Bundesliga football club, due to the club’s connection with financier Lars Windhorst, who was under investigation for possible violations of Germany’s banking act, as reported by the Financial Times.