Deutsche Bank's suspicious Russian trades count rises to $10 billion: source

Tue Dec 22, 2015 3:06pm EST
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By Arno Schuetze and Kathrin Jones

FRANKFURT (Reuters) - Deutsche Bank may have been used by some of its Russian clients as a hub for money laundering to a greater extent than previously assumed, a source familiar with the matter said on Tuesday.

The lender has found a total of $10 billion of suspicious trades, including $6 billion in so-called "mirror trades" that it identified earlier this year, the source said, adding that it had shared this information with watchdogs in September.

The "mirror trades" may have allowed Russian customers to move money from one country to another without alerting the authorities, potentially allowing them to breach the sanctions against Russia after its 2014 annexation of Crimea.

Deutsche Bank, which declined to comment on the size of the trades, said it is investigating certain equity trades in Moscow and London, adding the total volume of the transactions under review is "significant".

Deutsche Bank has been spent most of the year trying to put a series of legal and regulatory problems entailing billions of dollars in fines and settlements behind it and focus a new strategy. [nL8N12T36R]

New Chief Executive John Cryan said in late October Deutsche Bank was "vulnerable" in respect to possible large penalties for the Russian trades, adding provisions for them may not suffice.

A source familiar with the matter said Deutsche has for now put less than 1 billion euros aside for the issue. "But the case has the potential of becoming as big as Libor," the source said.

Earlier this year U.S. and British regulators fined Deutsche Bank $2.5 billion for its involvement in a global interest rate rigging scheme.   Continued...

The Deutsche Bank headquarters are seen in Frankfurt, Germany October 28, 2015. REUTERS/Kai Pfaffenbach/Files