The bank said that it has started negotiations with the Justice Department to resolve the claims the bank’s issuance and underwriting of residential mortgage-backed securities (RMBS) between 2005 and 2007.
Deutsche Bank said in a statement: “The bank confirms market speculation of an opening position by the DoJ of USD 14 billion and that the DoJ has invited the bank as the next step to submit a counter proposal.”
The Wall Street Journal earlier reported, citing sources familiar with matter, that the Department has asked the bank to settle investigations by paying $14bn.
However, the bank said that it has no intent to settle these potential civil claims anywhere near the number cited.
Deutsche Bank added: “The negotiations are only just beginning. The bank expects that they will lead to an outcome similar to those of peer banks which have settled at materially lower amounts.”
In May, the bank said that it expects further increase in legal costs this year, as it continues to face several lawsuits.
The bank's chief executive John Cryan said that it had set aside provisions of €5.4bn ($6bn) to settle pending litigation issues.
Due to a sharp increase in litigation charges to €5.2bn, the bank posted a net loss of €6.8bn last year, its first loss since the financial crisis of 2008.
Cyran said that the lender plans to reduce its annual cost base by around €5bn to less than €22bn by the end of 2018.
Image: Deutsche Bank in Warsaw, Poland. Photo courtesy of Deutsche Bank.
