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22 June 2018

Deutsche Bank spends $17 billion in a decade on legal costs

Despite spending $17 billion, the bank still has five of its biggest cases outstanding and has set aside $2.9 billion for litigation provision in the first quarter.


German's Deutsche Bank has spent more than $17 billion over the past decade in legal costs, according to calculations by Bloomberg, while chief executive officer Christian Sewing has reported the bank has resolved 15 out of its 20 biggest cases. This week, Deutsche agreed to pay $205 million to settle a long-running investigation of its foreign exchange trading by New York’s banking superintendent, resolving one of several remaining regulatory issues that have dogged the bank in the US. The latest settlement with New York’s Department of Financial Services comes years after other banks have resolved allegations of conspiring to manipulate currency trading.

Unresolved investigations

The settlement leaves Germany’s largest bank with several significant unresolved investigations in the US, as it embarks on its fourth global turnaround plan in three years and is scaling back staff in the US. In a statement, the bank said it was pleased that the New York regulator had recognized its ‘extensive cooperation and remediation’ and that the settlement is fully covered by the bank’s existing provisions.

$2.9 billion litigation provisions

The bank had 1.9 billion euros ($2.9 billion) in litigation provisions at the end of the first quarter. The justice department is currently investigating so-called mirror trades that allowed the bank’s Russians clients to take as much as $10 billion from the country, in what regulators in related settlements have called a breakdown of bank compliance. The US is also probing whether the bank violated US sanctions against Iran before 2008. Deutsche has also acknowledged that its hiring practices were under investigation by the Securities and Exchange Commission and Justice Department for possible violation of the Foreign Corrupt Practices Act, without mentioning any specific jurisdiction.

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