US seeks 14 billion dollars to settle Deutsche Bank investigation

The US Department of Justice is seeking 14 billion dollars from Deutsche Bank to settle an investigation of fraud cases involving the sale of mortgage-backed securities in the run-up to the 2008 financial crisis.

The bank confirmed the demand in a statement released late Thursday.

"Deutsche Bank AG confirms that it has commenced negotiations with the Department of Justice in the United States ('DoJ') with a view to seeking to settle civil claims that the DoJ may consider in connection with the bank's issuance and underwriting of residential mortgage-backed securities (RMBS) and related securitization activities between 2005 and 2007," the bank said.

The Wall Street Journal had first reported the US Justice Department demand.

Deutsche Bank spoke of "an opening position" of 14 billion dollars and said the Department of Justice has invited the bank to submit a counter-proposal as the next step.

Deutsche Bank said it "has no intent to settle these potential civil claims anywhere near the number cited."

"The negotiations are only just beginning," the statement added. "The bank expects that they will lead to an outcome similar to those of peer banks which have settled at materially lower amounts"

In the lead-up to the 2008 US financial crisis that triggered a global recession, US banks and investment firms sold deceptive mortgage-backed securities.

The availability of easy loans for home purchases triggered a housing bubble that started collapsing in 2007.

The three biggest US banks - JPMorgan Chase, Bank of America and Citigroup - each reached settlements with the US government totalling billions of dollars.

Last update: Fri, 16/09/2016 - 09:21

More from Business

Croatian Postal Bank posts record net profit of HRK 147.5 mln

The Croatian Postal Bank (HPB)'s net profit in the first nine months of 2016 was 38.1% higher compared to the same...

Apple earnings down, iPhone sales decline

Apple's latest results, posted Tuesday, showed a drop in revenue and declining iPhone sales.

Adris Group's Jan-Sept net profit HRK 570 mln

In the first nine months of 2016 the Adris Group generated a net profit of HRK 570 million while its total revenue...

Podravka Group posts net profit of HRK 142.2 mn

The Podravka food and pharmaceuticals group generated a net profit of HRK 142.2 million in the first nine months of...

IKEA Croatia increases turnover by 5.8%

IKEA Croatia has generated HRK 567.7 million (without Value Added Tax) in turnover or 72.4 million euro in the 2016 ...