Dec 22

Deutsche Bank Settles With DOJ: Will Pay $3.1 Billion Civil Penalty:

With analyst expectations/hopes in the $2 to $5 billion range (against the initial $14 billion fine), Deutsche Bank said it has reached settlement with US authorities to pay a $3.1 billion civil penalty (and provide $4.1bn in relieef to consumers). Removing considerable uncertainty about Deutsche’s capital position, one wonders how much this remarkably low-ball settlement had to do with Donald Trump’s current loan re-negotiations with the “world’s most systemically dangerous bank.”

As a reminder, the Wall Street Journal noted that DB’s attorneys had privately suggested that a $2 – $3 billion settlement with the DOJ was probably in the ballpark.  Meanwhile, wall street analysts had estimated settlements in the $2-$5 billion range.  Any fines paid pursuant to current negotiations would be in addition to the $1.9 billion already paid in 2013 to settle other U.S. claims related to mortgage-backed securities.

Per the table below, as of June 30, DB had reserved a total of €5.5 billion for civil litigation and regulatory penalties on it’s balance sheet.

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