Deutsche Bank's compliance revamp will be bumpy journey

Fri Sep 23, 2016 7:32am EDT
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By Arno Schuetze and Kathrin Jones

FRANKFURT (Reuters) - Deutsche Bank (DBKGn.DE: Quote) is going for long-term solutions rather than quick fixes in setting up its new compliance team to ensure the bank can put behind it the problems that have cost it billions of euros in fines, the bank's regulatory boss said.

Nearly a decade on from the financial crisis, Deutsche Bank is still struggling to recover from a string of scandals and costly litigation.

It has already paid more than 12 billion euros ($13.5 billion) since 2012 to resolve issues such as the rigging of interest rates, carbon trading fraud schemes and sanctions violations. Germany's biggest bank is also fighting a $14 billion demand from the U.S. Department of Justice to settle a mortgage mis-selling case.

Chief Regulatory Officer Sylvie Matherat, who was promoted to board level by CEO John Cryan, said she needed at least another year or so to complete the compliance set up.

"If you really want to solve a problem in a sustainable manner, it will take longer and will be more difficult," Matherat told Reuters in an interview.

"The current management team is trying not to do quick fixes. It's much better to clean up properly. But that takes time and the journey can sometimes get a bit bumpy."

She said that by year-end the bank will employ 2,200 people in compliance and anti-financial crime, 60 percent more than in 2014.

Germany's financial watchdog Bafin has praised improvements at Deutsche Bank under Cryan and said that the bank is on the right track.   Continued...

A logo of a branch of Germany's Deutsche Bank is seen in Cologne, Germany, July 18, 2016.  REUTERS/Wolfgang Rattay/File Photo