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Nicholas Haigh testified on day seven of Donald Trump’s civil trial for fraud brought against him, his sons, associates, and his real estate company by New York Attorney General Letitia James. He was questioned by Kevin Wallace of the NY AG’s office.

Mr Haigh was head of risk management at Deutsche Bank from 2008 to 2018 and dealt with high-net-worth individuals. He had the final say over whether to extend credit to such clients.

He described the factors the bank took into account when making decisions on extending loans. Specifically, collateral, as in assets, and how the bank decided whether or not it was enough to justify lending to the owner.

They would consider how liquid an asset was and whether there was a deep market for it or whether there was only a small pool of specialised buyers — for example, in a default the bank would not necessarily want to end up in possession of a difficult to sell asset such as a golf club.

Mr Haigh explained that this shows the importance of a personal guarantee for any debt from Mr Trump.

He gave the example of a 2011 loan from Deutsche Bank to the Trump Organization with collateral on the debt coming in the form of the Trump National Doral Club in Miami as well as a full unconditional guarantee by Donald Trump.

The bank noted that Trump bought the course for $150m and was looking to invest another $50m in it. Mr Haigh notes that the collateral was not typical as: “Golf resorts are relatively uncommon compared to other types of commercial real estate and the number of buyers … are limited.”

Therefore the personal guarantee from Mr Trump was important and a big factor in deciding whether to extend the loan.

“It was a way of the bank getting repaid that did not rely on the collateral,” Mr Haigh said, adding that the bank would not make a loan only ecured by collateral without a strong personal guarantee.

“Given that this was unusual collateral, a golf resort and spa, we would not want to foreclose on that collateral.”

A loan document shown to the court revealed Mr Trump reported a net worth of $4.26bn at the time, but Deutsche Bank made a conservative estimate that it was more like $2.3bn.

The attorney general’s case says that between 2011 and 2021, Mr Trump overstated his net worth by between $1.9bn and $3.6bn in the statements of financial condition.

Asked what he thought of the financial statements provided by Donald Trump and the Trump Organization, Mr Haigh said: “I assumed that the representations of value of assets and liabilities were broadly accurate.”

The court was then taken through a list of the “trophy properties” of the Trump empire — those deemed most high profile and lucrative — and their values, including Trump Tower and 40 Wall Street, which were valued by the company at $490m and $524m respectively.

Deutsche Bank believed they were worth less, though low-balled assets in general in case of a downturn, the court heard.

Mr Haigh reiterated the importance of a personal guarantee from a borrower for a loan from Deutsche Bank.

“So there’s a given that there would be a guarantee in the first place because [Deutsche Bank] wealth management did not do business without personal guarantees,” Haigh said.

“And the strength of that guarantee will be reflected in the pricing of the loan, also in the terms of the loan, including its size,” he added.

Another example was drawn from loan relating to the development of what would become the Trump International Hotel Washington, DC in the Old Post Office building on Pennsylvania Avenue.

The $170m financing required not just real estate collateral, but again also a personal guarantee from Mr Trump.

Under the terms of the deal, the now-former president was also bound by a series of covenants

• He had to maintain $50m in cash to be available at all times
• He couldn’t take out any further loans over $500m (even with Deutsche Bank)
• He had to maintain a net worth of $2.5bn.

New York Attorney General Letitia James states in her case against Mr Trump that due to the overstatement of Mr Trump’s net worth between 2011 and 2021, his actual net worth at the time was between $812m and $2.2bn.

When he applied for the DC hotel loan, Ms James’s office believed his net worth was $1.4bn. Therefore he was in breach of the covenants from day one.

The Trump legal team disputes this figure and argued his true worth was much higher than this, as reflected in the statements prepared by the Trump Organization. For example, in 2017 when the hotel had been completed, Mr Trump told Deutsche Bank his net worth was $5.7bn.

During cross-examination, Trump attorney Jesus Suarez asked about the earlier mentioned $150m 2011 loan to Donald Trump concerning his Doral golf club in Florida and noted there were four points given as the basis for the recommendation to approve lending the money.

• Financial strength of the guarantor ($2.5bn net worth. Good liquidity. $48m in cash flow)
• The nature of the personal guarantee
• Trump’s operating experience
• The expected enhanced value of the Doral golf course

It was also noted that two bank loan officers visited the Trump Organization offices to review financial statements as part of the process.

In another part of the document reviewed by the court, Mr Trump listed the total value of this real estate portfolio as $3.29bn. Deutsche Bank knocked this down to $2.04bn with $302m in debt.

Haigh confirmed that the bank’s valuation services people did their own valuations of the so-called trophy properties: Trump Tower, 40 Wall Street, Niketown on 57th Street, and Trump Park Avenue, all in Manhattan. Other assets he adds would be harder to value, namely the golf courses, which were given ballpark values.

Cross-examination of Mr Haigh will continue today before former Trump Organization CFO Allen Weisselberg returns to continue his direct examination.