Shares of embattled German banking giant Deutsche Bank AG (NYSE:DB) were up as much as 14% this morning, following reports that the company is close to a settlement with the U.S. Department of Justice.
Two weeks ago, the DOJ levied a record $14 billion fine against Deutsche, charging the bank with multiple crimes in how it handled mortgage-backed securities during the financial crisis.
Already on shaky ground due to a plethora of high-risk loans floating throughout the ailing EU, the massive fine from the DOJ exacerbated the bank’s woes and created major liquidity concerns. German regulators reportedly have met privately to discuss concerns about the bank, and if a bailout might be needed.
According to French news agency AFP today, which cited sources close to the negotiations, Deutsche is now nearing a $5.4 billion settlement with the DOJ. Such a move should allay worries about DB’s capital position for the time being.
Despite its precipitous share price declines this year, the bank’s CEO recently noted “few risks” for the troubled firm, and even penned a letter to employees today to try and assuage internal fears of a continued meltdown.
Deutsche Bank shares surged as much as 14% on the settlement news this morning, but have still lost more than 45% of their value since the start of 2016.