Deutsche Bank to settle US mortgage probe for US$7.2 bil

(Dec 23): Deutsche Bank AG said it reached a US$7.2 billion ($10.4 billion) agreement to resolve a years-long US investigation into its dealings in mortgage-backed securities, removing a legal hurdle that fuelled investor angst.

Deutsche Bank will pay a US$3.1 billion civil penalty and provide US$4.1 billion in relief to consumers under a settlement in principle with US authorities, which was announced by the Frankfurt-based bank in a statement early Friday. The firm expects pretax charges of about US$1.2 billion this quarter because of the fine.

While the deal is below the Justice Department’s initial request of US$14 billion, Germany’s biggest lender still faces US investigations into other matters and potentially expensive civil suits. Chief Executive Officer John Cryan has made resolving litigation a priority as he seeks to restore confidence in the lender.

---

Related Stories

• About the 'T+1' rulemaking US stock trades settle in a day
• Deutsche Bank hires Credit Suisse's Lim as Asia M&A co-head
• Credit Suisse was part of foreign-exchange 'conspiracy network,' lawyer says

---