Deutsche Bank drops on lack of DoJ deal

Deutsche Bank was under the cosh on Monday as investors were left disappointed that chief executive John Cryan failed to reach an agreement with US authorities at the weekend over a multi-billion dollar fine.

CMC Markets’ Michael Hewson said: “Deutsche Bank shares are down...after chief executive John Cryan coming away empty handed from his meetings with the Department of Justice over his bank’s potential $14bn fine.

“It was always going to be a tall order to come away with a deal that quickly, especially when the focus was with the World Bank and IMF.”

Investors had been hopeful some good news would be announced on Monday as Cryan attended the International Monetary Fund and World Bank’s autumn meetings in Washington over the weekend, raising hopes he might have been able to negotiate the fine.

There have been reports that the German lender would be able to strike a deal with US authorities to bring down the fine - which was imposed for the mis-selling of mortgage-backed securities - to just over a third.

The Financial Times reported on Monday that Deutsche Bank was given special treatment in the European bank stress tests carried out over the summer.

According to the FT, the lender, which has been using the results of the July stress tests as evidence of its healthy finances, was boosted by a special concession agreed by its supervisor, the European Central Bank.

Deutsche’s results included the $4bn proceeds from the sale of its stake in Chinese lender HuaXia even though the deal had not been done by the end of 2015, the official cut-off point for transactions to be included, the FT said.

At 1015 BST, DB shares were down 2.7% to €11.76.