Deutsche Bank to Settle U.S. Mortgage Probe for $7.2 Billion
- Civil penalty is $3.1 billion; balance is consumer relief
- Settlement compares with U.S. opening request of $14 billion
Deutsche Bank, Credit Suisse Settle U.S. Mortgage Probe
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Deutsche Bank AG said it reached a $7.2 billion agreement to resolve a years-long U.S. investigation into its dealings in mortgage-backed securities, removing a legal hurdle that fueled investor angst.
Deutsche Bank will pay a $3.1 billion civil penalty and provide $4.1 billion in relief to consumers under a settlement in principle with U.S. authorities, according to a statement early Friday. The fine will cut pretax profit by $1.2 billion this quarter as the firm taps existing legal reserves to blunt much of that cost. The relief may drag on earnings for years.