Deutsche Bank AG jumped in Frankfurt trading after a media report that the lender is nearing a $5.4 billion settlement with the U.S. Department of Justice in a probe tied to residential mortgage-backed securities, less than half an initial request.
The shares surged as much as 6.8 percent and traded up 5.1 percent at 11.42 euros at 5:19 p.m. after Agence France-Presse reported that the lender is nearing a settlement with the DOJ, citing an unidentified person familiar. A spokesman for the Frankfurt-based lender declined to comment, when contacted by Bloomberg News.
Deutsche Bank’s stock and debt have been under pressure after the DOJ earlier this month requested $14 billion to settle an investigation into residential mortgage-backed securities. In a memo to staff earlier on Friday, Chief Executive Officer John Cryan said he is taking DOJ settlements with other banks “as a benchmark,” echoing previous remarks that he expects U.S. authorities to scale back their request.
Deutsche Bank has long struggled to adapt to an era of tougher capital requirements and diminished trading revenue. Cryan has already said that the lender may fail to be profitable this year, calling it a peak restructuring year, as he eliminates thousands of jobs and cuts risky assets.