BERLIN: Deutsche Bank AG, Germany’s largest lender, is set to pay more than $1.5 billion in fines as global regulators wrap up a probe into interest-rate manipulation, according to a person familiar with the matter.
The lender this month will probably finalize a settlement with U.S. and U.K. authorities probing how traders colluded to rig the London interbank offered rate and related benchmarks to profit from their own derivatives bets, according to two people, who asked not to be identified because the talks are private. The unit expected to plead is Deutsche Bank Group Services, according to one of the people.
A settlement would remove a key legal threat that has haunted Deutsche Bank co-Chief Executive Officer Anshu Jain since 2012. The Libor scandal has forced at least one CEO, Barclays Plc’s Robert Diamond, to resign and cost banks billions of dollars in penalties. While Deutsche Bank’s fine is set to exceed those paid by any of the other seven banks that have settled with U.S. and U.K. regulators, analysts said it was in line or only marginally higher than their estimates.
The fine is “manageable and Deutsche Bank will be pleased to get it out of the way,” said Christopher Wheeler, a financial analyst at Atlantic Equities in London. Even so, it’s “seen as a reminder of the bad behavior of the investment bank which is linked to Jain,” the former head of the unit.
Deutsche Bank rose as much as 1.2 percent and was up 0.5 percent to 33.17 euros at 11:45 a.m. in Frankfurt trading. The shares have gained 34 percent this year, while the Bloomberg Europe Banks and Financial Services Index rose 16 percent.
