Date
24 August 2017
Deutsche Bank will pay US$3.1 billion in civil penalty and provide US$4.1 billion in relief to consumers. Photo: Reuters
Deutsche Bank will pay US$3.1 billion in civil penalty and provide US$4.1 billion in relief to consumers. Photo: Reuters

Deutsche Bank reaches US$7.2 bln settlement on US mortgage cases

Deutsche Bank AG said it reached a US$7.2 billion agreement to resolve a years-long US investigation into its dealings in mortgage-backed securities.

The Frankfurt-based company will pay US$3.1 billion in civil penalty and provide US$4.1 billion in relief to consumers under a settlement in principle with US authorities, Bloomberg reports, citing a statement released by the bank on Friday.

Germany’s biggest lender 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, Deutsche Bank still faces US investigations into other matters and potentially expensive civil suits.

“The financial consequences, if any, of the consumer relief are subject to the final terms of the settlement, and are not currently expected to have a material impact on 2016 financial results,” the bank said.

The Obama administration is pressing to wrap up investigations of Wall Street firms for creating and selling the subprime mortgage bonds that fueled the 2008 financial crisis.

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CG

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