Germany's biggest bank has reportedly detected billions of dollars in suspicious transactions by its Russian clients, in addition to the so-called "mirror trades" that the lender identified earlier this year.
Deutsche Bank has identified an additional $4 billion in suspicious trades involving its Russian operations, Bloomberg reported on Tuesday, citing several people with knowledge of the bank's review of the matter.
The new findings are in addition to the $6 billion in mirror trades already identified by the bank this year, bringing the total count to up to $10 billion.
The mirror trades involved clients using Deutsche Bank to buy securities in roubles only to sell them shortly after in a foreign currency.
The transactions 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."
Adding to the troubles
"The case has the potential of becoming as big as Libor," a source familiar with the matter told the Reuters news agency, adding that Deutsche Bank has set aside less than $1.1 billion for the issue.
The bank, which launched an internal probe into Russian securities trades in June, is also being examined by authorities to see if it had compliance programs ready for Russian sanctions and provided accurate information to regulators.
Russia's central bank recently handed Deutsche Bank a small fine of $5,000 for procedural shortcomings, but said that the bank was a victim of an illegal scheme and had taken measures to improve its systems, Reuters reported.
The case adds to the list of legal and regulatory woes the Frankfurt-based lender has had to face in recent times.
Earlier this year, US and British regulators fined Deutsche $2.5 billion for its involvement in a global interest rate rigging scheme.
In June, the bank announced the resignation of its co-CEOs Jürgen Fitschen and Anshu Jain.
As part of a new strategy, the lender also seized its activities in 10 countries and announced job cuts across its operations.
In Russia, Deutsche Bank has already decided to close its investment banking activities in the country, resulting in a reduction of its headcount by around 200 jobs from 1,300 it had in the middle of this year.
sri/dk (Reuters, Bloomberg)