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Deutsche Bank agrees to pay $10b settlement

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Deutsche Bank said it has reached a $US7.2 billion ($10 billion) agreement to resolve a years-long US investigation into its dealings in mortgage-backed securities, removing a major legal hurdle for the bank, reported The Age.

Deutsche Bank will pay a $US3.1 billion civil penalty and provide $US4.1 billion in relief to consumers under a settlement in principle with US authorities, which was announced by the Frankfurt-based bank in a statement on Friday. The deal compares with the Justice Department's opening request of $14 billion, which the firm has said it expected to whittle down.

While the agreement removes significant uncertainty hanging over Deutsche Bank, Germany's biggest lender remains under Justice Department investigation in several other matters and also faces potentially expensive civil suits. Chief Executive Officer John Cryan has made resolving major litigation a priority as he seeks to restore confidence in the lender.

Deutsche Bank expects to record pre-tax charges of about $US1.2 billion this quarter because of the civil penalty. "The financial consequences, if any, of the consumer relief are subject to the final terms of the settlement, and are not currently expected to have a material impact on 2016 financial results," the bank said.

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Reporter: Denes Osvalt
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Category: Politics, Business, Crime
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