Chuck Jeannes’ shadow is seen on the wall while he delivers a speech at the annual general meeting
Deutsche Bank (DBKGn. DE) will be free to focus on a new growth strategy instead of devoting most of its energy to cleaning up past mistakes, Chief Executive John Cryan said after settling its most costly legal headache.
“Given other lawsuits, it is still too early to talk of having drawn a line under all matters,” Cryan said in a message to the company’s around 100,000 employees on Wednesday.
“We are, however, nearing our objective of being able to concentrate primarily on the future instead of repeatedly having to look over our shoulders at past events.”
Germany’s biggest bank on Tuesday finalised a $7.2 billion settlement with the DoJ over its sale of toxic mortgage securities in the run-up to the 2008 financial crisis.
Combined with an earlier $1.9 billion settlement with U.S. government-controlled Fannie Mae and Freddie Mac, America’s biggest providers of housing finance, the total bill for the mortgages issue stands at $9.1 billion.
Deutsche agreed with the DoJ to a statement of facts that describes how it made false and misleading representations to investors about the loans underlying billions of dollars worth of mortgage securities it issued in 2006 and 2007.
“Ultimately, Deutsche Bank enriched itself by paying reduced prices for risky loans while representing to investors valuation metrics based on appraisals the bank knew to be inflated,” the statement said.
With the U.S. mortgages case out of the way, three main litigation cases remain — a probe into suspicious equity trades in Russia, investigations into alleged foreign exchange manipulations and alleged U.S. sanctions violations.
All three are expected to result in manageable costs.
The bank remains hopeful of reaching a deal on Russia by March and booking the case retroactively in its 2016 accounts while paying significantly less than the 1 billion euros ($1.07 billion) it has provisioned, people close to the bank have said.
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