Bulletin: Deutsche Bank AG Ratings Not Immediately Affected By U.S. Litigation Settlement Negotiations

LONDON (S&P Global Ratings) Sept. 16, 2016--S&P Global Ratings said today that its ratings on Deutsche Bank AG (BBB+/Negative/A-2) are not immediately affected by reports that it is negotiating a settlement with the U.S. Department of Justice (DoJ). Deutsche Bank announced that the DoJ has demanded $14 billion to settle civil claims in connection with Deutsche Bank's issuance and underwriting of residential mortgage-backed securities in 2005-2007. Deutsche Bank disclosed that the DoJ has invited it to make a counter proposal, and it expects the resulting negotiations will lead to an outcome similar to those of peers, where the parties settled for materially lower amounts. Deutsche Bank held €5.5 billion of litigation reserves on June 30, 2016, and identified a further

...LONDON (S&P Global Ratings) Sept. 16, 2016--S&P Global Ratings said today that its ratings on Deutsche Bank AG (###+/Negative/A-2) are not immediately affected by reports that it is negotiating a settlement with the U.S. Department of Justice (DoJ). Deutsche Bank announced that the DoJ has demanded $14 billion to settle civil claims in connection with Deutsche Bank's issuance and underwriting of residential mortgage-backed securities in 2005-2007. Deutsche Bank disclosed that the DoJ has invited it to make a counter proposal, and it expects the resulting negotiations will lead to an outcome similar to those of peers, where the parties settled for materially lower amounts. Deutsche Bank held 5.5 billion of litigation reserves on June 30, 2016, and identified a further 1.7 billion of unreserved contingent litigation liabilities. The latter are defined as obligations that can be estimated and where a loss is considered less than probable, but more than remote. Our capital and earnings forecasts...

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