Deutsche Bank Rebuffs U.S. Over $14 Billion Mortgage Settlement
Deutsche Bank AG said it won’t pay the $14 billion sought by the U.S. Justice Department to settle an investigation into the firm’s sale of residential mortgage-backed securities, a figure that’s more than triple what some analysts estimated could be a potential worst-case.
“Deutsche Bank has no intent to settle these potential civil claims anywhere near the number cited,” the company said in a statement early Friday in Frankfurt. “The negotiations are only just beginning. The bank expects that they will lead to an outcome similar to those of peer banks which have settled at materially lower amounts.”
Germany’s largest lender confirmed that it had started negotiations with the Justice Department to settle civil claims the U.S. may consider over the bank’s issuing and underwriting of residential mortgage-backed securities from 2005 to 2007. The $14 billion is considered an “opening bid” that could go “much lower,” according to the Wall Street Journal, which reported the figure shortly before Deutsche Bank issued its statement.
U.S. shares of Deutsche Bank tumbled 6.5 percent to $13.80 in extended trading at 7:03 p.m. in New York. The company’s stock has plunged 42 percent this year in Germany through the close of trading Thursday.
Justice Department spokesman Peter Carr declined to comment on the negotiations.