Deutsche Bank shares plunge as US officials propose £10bn securities settlement

Shares in Deutsche Bank have plummeted more than 8% after the US Department of Justice (DoJ) proposed it should pay a 14 billion US dollar (£10.5 billion) settlement linked to the sale of mortgage-backed securities in the run-up to the financial crisis.

Despite the firm saying it has "no intent" to pay the full amount, shares in the troubled lender tanked.

Earlier this year, the DoJ agreed a five billion US dollar (£3.7 billion) settlement with Goldman Sachs over similar claims. Other banks which settled recently include Bank of America, Citigroup and JP Morgan.

Deutsche Bank said in a statement: "Deutsche Bank has no intent to settle these potential civil claims anywhere near the number cited.

"The negotiations are only just beginning. The bank expects that they will lead to an outcome similar to those of peer banks which have settled at materially lower amounts."

Deutsche Bank is facing a host of problems as it moves to meet tougher regulatory requirements, cut costs and settle several legal investigations.

German Finance Ministry spokeswoman Friederike von Tiesenhausen weighed into the debate, saying Germany is "aware that US authorities have agreed with other banks on settlement payments, and so the German government assumes that a fair result will be reached at the end of this process as well, on the basis of equal treatment".

She added that she does not "share the assessment" that the DoJ ruling is retaliation for a 13 billion euro (£11 billion) tax bill the European Commission slapped Apple with earlier this year.

Deutsche Bank is one of a number of lenders to be probed over dealings involving questionable mortgages during the period, with the principal charge being that banks misled investors about the quality of their loans.

The resultant losses suffered by investors, along with foreclosures across the US, formed one of the triggers for the financial crisis.

The DoJ has invited the bank to submit a counter proposal.

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