Deutsche Bank is taking off after Agence France-Presse reported the bank is closing in on a $5.4 billion settlement with the US government over mortgage-backed securities from the financial crisis.
This is much lower than the $14 billion settlement originally reported two weeks ago.
The settlement announcement could come in the next few days, according to the AFP report, which cited a source close to the matter.
After sinking to an all-time low on Thursday, US-traded shares of Deutsche Bank are up around 15% and German shares are up over 6% on Friday following the news.
The last two weeks have been troubling for the German bank. After a report that it may be subject to $14 billion in fines by US regulators over bad derivative products from the financial crisis, shares of Deutsche began a tailspin. Additionally, rumors of a bailout – or lack thereof – from the German government and hedge funds decreasing their exposure to Deutsche Bank haven’t helped.
On Friday, however, CEO John Cryan sent a letter to employees assuring them that the bank is still stable. Additionally, the consensus from analysts is that the bank will not settle for the $14 billion and should be able to make it out of the current crisis (though that wouldn’t remedy larger, long-term issues).
Following the positive news, shares have popped over 15% as of 2:05 p.m. ET, to $13.21 a share.
- Business Insider/Andy Kiersz, data from Bloomberg
German shares are also well off their lows of the day, up 6.4%, at €11.57 per share.