Deutsche Bank fined US$41m over money laundering lapses
FRANKFURT: Deutsche Bank AG agreed to pay US$41 million (RM175.6 billion) to settle Federal Reserve (Fed) allegations that its United States operations failed to maintain adequate protections against money laundering, the latest in a string of fines that have cost the lender billions of dollars.
The bank’s US operations fell short in complying with the Bank Secrecy Act, which requires lenders to help federal agencies prevent illegal transactions, said the Fed in a brief statement on Tuesday.
The regulator imposed a ceaseand-desist order on Deutsche Bank that requires it to address “unsafe and unsound practices”. The bank also agreed to improve its controls and boost oversight of senior management.
“We are committed to implementing every remediation measure referenced in the US central bank’s order and to meeting their expectations,” said Deutsche Bank in a statement.
The fine is within the lender’s expectations, said a source, suggesting it’s covered by legal provisions that stood at €3.2 billion (RM15.41 billion) at the end of March.
Chief executive officer John Cryan has spent almost two years navigating probes, culminating in a US$7.2 billion mortgagebond settlement with the US government in January.
Cryan is now focusing on restoring revenue growth after raising US$8.5 billion from investors in April to replenish capital eroded by fines.
The bank’s insufficient monitoring involved billions of dollars in “potentially suspicious transactions” processed between 2011 and 2015, said the Fed.
The transactions involved affiliates in Europe that failed to provide “accurate and complete information”, said the regulator.
While the US central bank didn’t disclose any specific transactions that were improper, Deutsche Bank has faced multiple investigations by various regulators into whether it allowed customers to engage in illicit trades. Bloomberg