Deutsche Bank To Make Settlement With The Fed On Russia Soon

Deutsche Bank AG (DE:DBKGn) (NYSE:DB) is expected to reach a settlement with the Federal Reserve soon over an inquiry about the bank’s involvement in helping clients move about $10 billion out of Russia in the 2011–2015 period. However, people familiar with the matter declined to comment on the amount of fine that can be imposed.

Per the New York Department of Financial Services, the bank is charged of buying blue-chip Russian stocks in rubles and selling them in London, converting rubles to dollars outside Russia. This practice, known as mirror trades, is sometimes legal but can also be used by banks in money laundering or tax evasion.

Though the bank is hopeful on the Fed settlement, the investigation of U.S. Justice Department is unlikely to end anytime soon. Further, the department is said to have registered a number of requests with Deutsche Bank for disclosing information related to the matter since last year.

Following the deferred-prosecution deal signed between the bank and Justice Department after the bank confessed its involvement in interest-rate manipulation, prosecutors have always kept a close watch on the bank’s activities. Per the terms of the agreement, Deutsche Bank will cooperate with the government in return for not being prosecuted.

Furthermore, the matter seems to have gained further political interest because of Trump’s $300 million loan outstanding with the bank, along with connection of associates of Russian President Vladimir Putin with the money transferred from Russia.

Seeing this as an opportunity, the Democrats have raised questions on the authenticity of investigation being performed by Trump appointed leaders of the Justice Department. Moreover, they have recently requested the bank to provide reports related to the matter and details on accounts held by Trump and his family members.

The bank has recently been involved in various legal matters which significantly impacted its financials. The latest is a $7.2 billion agreement signed with the U.S. Department of Justice over its sale of toxic mortgage securities.Also, Deutsche Bank recently received the approval of its shareholders with regard to raising capital. This capital raise is seen by the bank as an opportunity to build its capital position.

Deutsche Bank’s shares have gained 25.3% in the last six months, outperforming the 12.2% growth for Zacks categorized Banks - Foreign industry.

Currently, the bank carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the same space include Bank of N.T. Butterfield & Son LTD (NYSE:NTB) , HDFC Bank Limited (NYSE:DB) and UBS Group AG (NYSE:UBS) .

Bank of N.T. Butterfield & Son and HDFC Bank carry a Zacks Rank #2 (Buy), whereas UBS Group sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bank of N.T. Butterfield & Son’s earnings estimates were revised upward by 5.9% for the current year, in the past 30 days. Also, its share price jumped 14.4%, over the last six months.

HDFC Bank’s current-year earnings estimates were revised 2.3% upward, over the last 60 days. Further, its shares increased 32.0%, in the last six months.

UBS Group witnessed a 5% upward earnings estimates revision for the current year, in the past 30 days. Moreover, its shares gained 3.0% in the last six months.

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