Deutsche Bank shares drop after CEO fails to agree deal with US

Deutsche Bank shares drop after CEO fails to agree deal with US

Deutsche Bank (ETR:DBK) shares fell in early trade on Monday after reports that its CEO had failed to agree a deal with US Department of Justice to lower their $14 billion fine.

Chief executive John Cryan was in the US over the weekend for the autumn meetings of the International Monetary Fund and the World Bank, with many hoping he would agree a new figure for the bank’s fine with the US authorities whilst he was there. However, it has been reported that no new deal was made.

The bank was handed the fine back in September for its part in causing the 2008 financial crisis. It is the largest fine awarded so far, causing Deutsche Bank shares to drop dramatically since on worries that the bank will be unable to pay it.

The lender was the biggest faller on Germany’s main stock market in early trading but has since regained some ground, currently trading down 0.83 percent at 12.19 (1248GMT).

Michael Hewson, chief market analyst at CMC Markets, told the BBC: “Deutsche Bank hasn’t as yet been able to come to any agreement with the US Justice Department as it looks to overcome the hurdle of the prospect of a rather large fine.

“Talks are continuing while the bank looks at potentially spinning off a stake in its asset management division in order to free up some extra capital.”