Reported by Olaf Storbeck

Germany’s financial watchdog has threatened to fine Deutsche Bank after the lender failed to fix flaws in its anti-money laundering controls, in the latest setback for chief executive Christian Sewing. 

Sewing promised to put an end to Deutsche Bank’s long-running legacy of control shortcomings and misconduct scandals after becoming chief executive in early 2018, forking out more than €2bn to improve internal control systems. 

Yet the bank on Thursday acknowledged that the improvements to its transaction monitoring systems demanded by BaFin had only been “partially completed”.

The US Federal Reserve fined Deutsche Bank$186mn last year for a “material failure” to fix “unsafe and unsound banking practices” that the bank had promised to resolve as long ago as 2015. In 2022, the supervisory board capped Sewing’s bonus, along with nine other members of the management board, over the delays in improving internal controls. 

BaFin said on Thursday that it had extended the mandate of its special monitor, dispatched in late 2018, until October 2024.

Read full report: https://www.ft.com/content/a8684c01-3f05-4d39-b182-a7e4671bf647