First News
Volume:7, Number:26
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Business & Finance 2
THIS WEEK

Deutsche Bank to Pay USD7.2 Billion to Settle US Subprime Case

Deutsche Bank has agreed to a USD7.2-billion settlement with the US department of justice over its sale and pooling of toxic mortgage securities in the run-up to the 2008 financial crisis. The agreement in principle, announced by Deutsche Bank's Frankfurt headquarters on December 23, offers some relief to the German lender, whose stock was hit hard in September after it acknowledged the justice department had been seeking nearly twice as much. It also highlights the justice department's recent efforts to hold European banks accountable for shoddy securities that contributed to the US housing market collapse. Deutsche Bank does not plan a capital increase to cover the settlement. The lender expects the agreement to be finalized in early 2017, before president-elect Donald Trump takes office, said the source, who spoke on the condition of anonymity. Deutsche does expect to record a pretax charge of about USD1.17 billion in its fourth quarter because of the civil monetary penalty.

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