Deutsche nears US case deal, bonus

China Daily (Hong Kong) - - BUSINESS - By BLOOMBERG

Deutsche Bank AG em­ploy­ees may owe their cash bonuses for 2016, how­ever mod­est, to a last-minute bar­gain by Chief Ex­ec­u­tive Of­fi­cer John Cryan.

The be­lea­guered Ger­man bank, long em­broiled in ne­go­ti­a­tions with the US Jus­tice Depart­ment, was inch­ing closer in re­cent weeks to a res­o­lu­tion over its sale of de­fec­tive res­i­den­tial mort­gage-backed se­cu­ri­ties that fu­eled the global fi­nan­cial cri­sis.

Deutsche Bank had no de­sire for a drawn-out court fight. Around the same time pros­e­cu­tors filed a law­suit against Bar­clays on Thurs­day, Deutsche Bank’s lawyers said a hol­i­day deal seemed pos­si­ble.

Cryan pounced, ac­cord­ing to some­one close to the talks. The bank agreed to pay just $3.1 bil­lion in cash to re­solve the case and $4.1 bil­lion in re­me­di­a­tion to home­own­ers.

It’s a vic­tory for a firm that had faced an open­ing gam­bit from pros­e­cu­tors of $14 bil­lion, and for the CEO, who’s been ham­strung by myr­iad reg­u­la­tory prob­lems in the US and abroad. The cash penalty is well within the range the bank had an­tic­i­pated, eas­ing con­cerns about cap­i­tal pres­sure.

Res­o­lu­tion of the case be­fore Satur­day may en­able Deutsche Bank to set aside money for bonuses, a re­lief for a firm that has strug­gled to keep its best em­ploy­ees. In re­cent months, ex­ec­u­tives had con­tem­plated re­plac­ing cash bonuses with stock.

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