The German government denies it's working on a rescue of Deutsche Bank as Germany's biggest lender boosted its balance sheet by selling its British insurance business on Wednesday.
Deutsche is facing a $US14 billion ($A18 billion) fine from the US Department of Justice and concerns over its funding pushed its shares to a record low on Tuesday and heightened concerns about the health of the financial sector in Europe's largest economy.
The finance ministry dismissed a newspaper report that a rescue plan was being prepared in case Deutsche was unable to raise capital to pay for costly litigation.
Weekly Die Zeit had reported that the German government and financial authorities were working on possible steps to enable Deutsche to sell assets to other lenders at prices that would ease the strain on the lender.
The German government would even offer to take a direct stake of 25 per cent in an extreme emergency, the paper said, without saying where it got its information.
The government was still hoping Deutsche would not need state support and only scenarios for a potential rescue were being discussed so far, Die Zeit added.
"This report is wrong. The German government is not preparing any rescue plan, there is no reason to speculate on such plans," the finance ministry said in a statement.
Two sources close to the matter also said that German financial regulator Bafin was not working on an emergency plan.
A Deutsche Bank spokesman referred to an interview Chief Executive John Cryan gave German daily Bild on Wednesday and denied the report.
"At no point did I ask the chancellor for support. Neither did I suggest anything like that," the Briton told Bild in response to a report that said he had asked Angela Merkel for her backing with a $US14 billion to settle the US investigation into its sales of mortgage-backed securities.
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