Deutsche Bank puts aside $1.3bn for Russia trading probe

By bne IntelliNews October 30, 2015

Deutsche Bank hiked its litigation reserves by $1.3bn in the third quarter mainly to cover alleged violations at the lender's Russian unit. 

The lender said on October 29 it had discovered abuses of internal policies during its investigation into so-called ''mirror-trading'', which may have enabled Deutsche Bank's clients to shift money offshore without alert the relevant authorities.

"We can't say much because we don't know much and that's shame on us,'' co-CEO John Cyran said at an investor conference in London. "It looks as though the bank was used."

Tim Wiswell, head of Russian equities at Deutsche Bank, lost his job earlier this year after 12 years at the lender amid an investigation by US and European regulators into transactions worth over $6bn over four years. Wiswell said on October 7 that he is suing his former employer for wrongful dismissal.

Germany's biggest bank has already forked out about $12bn on litigation costs like fines and settlements since 2012 for scandals that included the rigging of interest rates in the UK.  If the bank is found guilty of wrongdoing, industry sources have indicated the fine could be as much as  a $1bn.  

The scandal is the biggest involving a foreign bank in Russia since Bank of New York agreed to settle a $22.5bn lawsuit in 2009 relating to a 1990s money laundering scandal.  Lawyers for the Russian government had sought $1bn but the case was settled with the bank paying Russia's legal fees of $14mn as well as providing a loan on favourable terms of $400mn to Russian banks. 

Deutsche Bank shut down its investment bank operations in Moscow and axed at least 200 employees following the allegations of money laundering.

Related Articles

Austria’s Oberbank signs its anticipated €1bn finance deal with 14 Iranian banks

Austria’s Oberbank signed its anticipated finance deal valued at over €1bn with 14 Iranian private banks on September 21, according to Iran Student News Agency. Oberbank CEO Franz Gasselberger ... more

Bank Melli Iran London reopens offshore bank in Hong Kong

Bank Melli Iran London PLC announced on September 18 that it has reopened its former branch in Hong Kong after several years of closure, Islamic Republic News Agency reported. British-registered ... more

Ukraine places $3bn in 15-year Eurobonds at 7.375%

Ukraine has placed $3bn in 15-year Eurobonds at 7.375% per annum, Ukrainian President Petro Poroshenko said during a meeting with international investors in New York on September 18. "Ukraine has ... more

Dismiss