Deutsche Bank’s settlement follows months of negotiations with the U.S. government.
By
JENNYSTRASBURG
Deutsche Bank AG agreed to pay a $3.1 billion penalty, plus provide $4.1 billion in consumer relief, to settle mortgage-backed securities claims with the U.S. Justice Department, the lender said late Thursday.
The German bank said it would take a roughly $1.17 billion pretax charge this quarter as a result of the $3.1 billion penalty. The additional consumer relief has less immediate and less solid consequences, because it is to be paid out over at least five years, the bank said in a statement late Thursday night.
The impact of the $4.1 billion consumer relief could fluctuate over time. The bank said that portion of the settlement isn’t expected to have a material impact on its 2016 financial results.
The settlement was agreed “in principle” with the Justice Department, Deutsche Bank
DB, -0.91% said. It follows months of negotiations with the government, which initially had suggested Deutsche Bank pay $14 billion total to settle the matters. Deutsche Bank said in September it wouldn’t pay nearly that much.
