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No Deal for Deutsche Bank, DOJ Re: $14 Billion Fine

Monday, October 3, 2016 4:09
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(Before It's News)

Deutsche-Bank-windowContrary to reports late last week, Deutsche Bank AG (NYSE:DB) has not reached a deal with the U.S. Department of Justice, and is only now beginning negotiations to settle a massive $14 billion fine.

DB shares had surged 14% last Friday on rumors the two factions had completed a $5.4 billion settlement, but that report appears to have been premature. From the WSJ:

Deutsche Bank AG’s talks with the U.S. Justice Department to settle a high-profile set of mortgage-securities cases are continuing, with no deal yet presented to senior decision makers for approval on either side, according to people familiar with the matter.

The talks are moving forward, but they have not progressed to a degree that a proposed deal has reached senior-level review at the Justice Department or with Deutsche Bank’s supervisory board, people familiar with the matter said.

Deutsche Bank CEO John Cryan has repeatedly stressed that his company sees “few risks” of further problems, and even penned a letter to employees last week blaming speculators for DB’s precipitous decline. That viewpoint is in opposition to reports that German regulators recently discussed a potential bailout.

Some analysts believe DB is “significantly undercapitalized” to handle continued headwinds. Along with the fine from the DoJ stemming from the financial crisis, the company faces challenges linked to low interest rates, a slow-growing European economy, and tough competition from its American rivals.

DB-2016-10-03

Deutsche Bank’s U.S.-listed shares fell $0.19 (-1.45%) to $12.90 in premarket trading Monday. Year-to-date, DB has fallen 45.8%.

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