Deutsche Bank to pay $7.2 bn to settle US subprime case
The payment includes a $3.1 billion dollar fine and $4.1 billion in relief to consumers in an agreement in principle with US authorities.
Berlin: Deutsche Bank has agreed to pay a total of $7.2 billion to settle a case with the US Department of Justice over its role in the subprime mortgage crisis, the lender said in a statement Friday.
The payment includes a $3.1 billion dollar fine and $4.1 billion in relief to consumers in an agreement in principle with US authorities, it said.
Deutsche has been negotiating the terms of the fine with the DoJ since September, when the US authority targeted it with a $14 billion penalty.
Chief executive John Cryan had always insisted that the bank would pay less than the initial demand.
Fears that the fine would outweigh the firm's provisions of 5.9 billion euros ($6.2 billion) for outstanding legal cases have weighed on Deutsche since the fine was announced.
Investors fear their stakes will be diluted if the lender -- already struggling with a massive restructuring and a morass of legal entanglements around the world -- is forced to raise fresh capital to cover the fine.
The bank's share price has been hit hard by uncertainty over the issue.