Deutsche Bank is about to settle a U.S. lawsuit brought by a German state lender, Bayern LB, that accuses Germany’s largest bank of selling it €605 million ($809 million) worth of toxic residential mortgage-backed securities during the years leading up to the 2008 global financial crisis.
The lawsuit is only one of many that Deutsche Bank is currently facing. In the United Kingdom, the German banking giant is accused of manipulating London Interbank Offered Rate (LIBOR) interest rates and the price of gold. In addition, its co-chief executive, Jürgen Fitschen has been charged in Germany with attempted fraud in a suit brought by the heirs of late German media mogul Leo Kirch.
The bank is poised to settle the U.S. suit with Bayern LB, according to people with knowledge of the situation interviewed by Handelsblatt. Bayern LB said it had reached a “basic agreement” but the details needed to be worked out, Reuters reported. A Deutsche Bank spokesman, Armin Niedermeier, said the bank declined to comment.
“This settlement will of course hurt Deutsche Bank,” said Stefan Bongardt, an analyst with Frankfurt-based Independent Research in an interview with Handelsblatt Global Edition. “But the other lawsuits that are still pending are definitely more serious than this one.”