Deutsche Bank had begun settlement talks with the US Department of Justice over its probe into the German bank’s origination and securitisation of mortgage-backed securities, as it posted a slump in second-quarter profits.
John Cryan, chief executive, has made clear that he wants to resolve Deutsche Bank’s big outstanding legal cases quick.
Deutsche Bank had already built up a reserve of €5.4 billion to deal with its legal woes, although it said on Wednesday morning that it had not taken provisions for all parts of the RMBS probes. It added a further €120m in litigation provisions in the second quarter.
Deutsche Bank’s core tier one capital ratio has improved slightly from 10.7% at the end of March, to 10.8% at the end of June.
Deutsche Bank’s revenues were 20% lower than a year earlier. Mr Cryan said in a note that this was partly due to “a challenging market environment with historically low interest rates and significant uncertainties”, and partly due to Deutsche Bank’s decision to exit various businesses.
