Deutsche Bank has agreed a $7.2 billion deal to end a United States probe into suspect dealings in mortgage-backed securities it handled years ago.
The bank, which was in the crosshairs over the transactions which were among the triggers for the 2008 global banking collapse, will pay a $3.1 billion penalty and provide $4.1 billion in relief to consumers under the deal agreed with the US Department of Justice (DoJ).
"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 Frankfurt-based bank said in a statement on Friday. The bank said it expects pretax charges of nearly $1.2 billion in the current quarter owing to the steep fine.
The US Justice Department had initially marked up $14 billion to be levied from Germany's top bank in fines. Deutsche Bank has so far paid more than $9 billion in fines and legal settlements worldwide since 2008. The bank, which has battled a slump in earnings in the face of challenging global scenario and has warned it may not be profitable this year.
The Obama administration, which placed huge thrust on taking big banks accountable for the subprime crisis that ballooned into the financial meltdown, has already collected more than $46 billion in fines from six major US banks.
The settlement with the DoJ will not stop other investigations into the bank over alleged foreign-currency rates manipulation and other charges. It also faces charges of helping investors illegally transfer billions of dollars out of Russia, the report said.