The details of the relationship between a client and his or her private bank tend to be closely guarded. But this isn’t the case with Donald Trump, the 45th President of the United States.
Thanks to the efforts of the US media not only do we know the bank that he deals with almost exclusively, but we also know the name of the private banker, along with many details of what appears to be a very one-sided relationship.
Deutsche Bank is Mr Trump’s preferred banking institution, or perhaps, more pertinently, probably the only financial institution that will deal with him.
Donald Trump
Rosemary Vrablic, a managing director and senior private banker, who joined Deutsche in 2006 after stints at Citigroup and Bank of America (BoA), is Mr Trump’s private banker.
And the relationship is strange, to the say the least.
Because after a protracted dispute between Mr Trump and Deutsche following the former’s refusal to repay outstanding loans worth many hundreds of millions of dollars, Ms Vrablic recruited the future President as a client following the intervention of his son-in law Jared Krushner, another client. And then went on to lend Mr Trump hundreds of millions of dollars.
What Mr Trump wants Mr Trump gets, appears to be the modus operandi.
Mr Trump is a very unusual man however. He is very rich with a fortune that may be worth around $2.5 billion according to Forbes.
But he also acquired a lot of undesirable baggage.
“Trump has famously survived one impeachment, two divorces, six bankruptcies, twenty-six accusations of sexual misconduct, and an estimated four thousand lawsuits,” writes Jane Mayer, The New Yorker’s chief Washington correspondent, in the latest issue of the magazine.
On the financial front he has also acquired a lot of debt, much of which must be repaid or rolled-over imminently.
According to The New York Times Mr Trump faces deadlines for more than $300 million in loans that he has personally guaranteed, almost all of which is owed to Deutsche.
The Financial Times meanwhile estimates that about $900 million of Mr Trump’s real estate debt will become due over the next four years.
Worse, Mr Trump is in dispute with the US Internal Revenue Service (IRS) over deductions that he has claimed on his income tax returns. An adverse settlement could cost another $100 million.
Whatever the outcome of the presidential election it seems that Mr Trump is going to need all of Ms Vrablic's private banking skills over the next few years.
These should certainly not be underestimated.
After all it must really take something to recruit a new client as Ms Vrablic did with Mr Trump who has just inflicted a haircut of around $270 million on the bank. And then put the loan taps back on, full blast.
Soon after being recruited as a private banking client Mr Trump secured a loan of more than $100 million to buy the Doral Golf Resort and Spa together with another $100 million to pay-off monies owed to another division of Deutsche according to The New York Times..
Another $170 million followed to convert Washington DC’s Old Post Office building into another Trump-branded hotel.
Indeed, Deutsche was apparently willing to underwrite a $1 billion prospective purchase of the Buffalo Bills American football franchise. Fortunately, for both Deutsche and Mr Trump this attempt failed.
It was only in 2016 that Mr Trump’s reputation had worn thin with Deutsche declining to advance yet more money to finance another putative golf resort project in Scotland.
Of course being asset rich Mr Trump could merely sell-off part of his real estate fortune to help finance his outstanding debts.
Or he could assign his post-presidential earnings to help offset his debts. After all his immediate predecessors have made tens of millions of dollars on book deals, conference talks and other activities.
Past form, especially given his prior dealings with Deutsche, suggests that this may not be the actual outcome.
Mr Trump has a habit of turning on his creditors with lawsuits as Deutsche has already found to its cost.
And, all this assumes that Mr Trump will remain at liberty to contest any claims.
“It’s the office of the Presidency that’s keeping him [Mr Trump] from the prison and the poorhouse,” Timothy Snyden, a professor at Yale told The New Yorker’s Jane Meyer.
Which raises the question, yet again, of why Deutsche decided to renew its banking relationship with Mr Trump.
It seems, in retrospect, to be the act of a dysfunctional institution to say the least.
