Deutsche Bank in settlement talks with DoJ over mortgage probe

Deutsche Bank said it had begun settlement talks with the US Department of Justice over its probe into the German lender’s origination and securitisation of mortgage-backed securities, as it reported a slump in second-quarter profits.

Along with a joint US-UK probe into alleged mirror trades involving Deutsche’s Russian business, the DoJ’s investigation into alleged mis-selling of residential mortgage-backed securities (RMBS) is one of the biggest legal uncertainties hanging over the bank.

Several other big banks — including JPMorgan, Bank of America and Citigroup — have already reached settlements with US authorities over miss-sold mortgage-backed securities. The most recent was in April, when Goldman Sachs reached a $5.1bn settlement.

John Cryan, chief executive, has made clear that he wants to resolve Deutsche’s big outstanding legal cases as soon as possible, and said earlier this year that he would get personally involved in the efforts to do so.

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