Money laundering: Deutsche Bank says adverse findings could damage finances, reputation
29 Oct 2018

Deutsche Bank’s financial position and its image could be badly hit if ongoing regulatory investigations and compliance measures find against it, the lender warned in its latest results.

Last month, the bank was ordered by German banking watchdog BaFin to improve its anti-money laundering controls two months after it reportedly found shortfalls in fully identifying its clients and their source of wealth.

“On September 21, 2018, the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, “BaFin”) issued an order requiring us to implement measures on specified timelines over the coming months and years to improve our control and compliance infrastructure relating to anti-money laundering and, in particular, the know-your-client (KYC) processes in CIB, and appointed KPMG as special representative to monitor implementation,” Deutschs said in its Q3 report.

“Our anti-money laundering and KYC processes, as well as our other internal processes that are aimed at preventing use of our products and services for the purpose of committing or concealing financial crime and our personnel responsible for our efforts in these areas, continue to be the subject of scrutiny by authorities in a number of jurisdictions.

“If these authorities determine that the Bank’s processes were materially deficient or if we are unable to significantly improve our infrastructure and control environment in a timely manner, our results of operation, financial condition and reputation could be materially and adversely affected.”

Deutsche’s concerns come a year after it was hit with significant fines in the United States and United Kingdom for violating anti-money laundering controls.

In 2017 it paid the New York Department of Financial Services $425 million and Britain’s Financial Conduct Authority £163 million over a Russian “mirror trading” money laundering scandal.

Irene Madongo

Advance your CPD minutes for reading this article, by signing up and using the CPD Wallet

FREE CPD Wallet
Must Read

Bearing witness to financial crime, across party lines

If it seems like an odd recipe for financial oversight, it’s also a surprisingly effective one: take five to ten congressional staffers, exile them to a squalid basement office with “hard-boiled” charm in the U.S. Senate’s oldest building, give them access to subpoena powers and a seemingly endless series of… Read More

Anti-money laundering analysis: UK FCA and EU blacklists update

A key element in the application of the risk-based approach (RBA) to financial crime is the identification by a firm of those countries with which its customers are closely linked and which are also adjudged to be high risk in financial crime terms. There are many lists of such high-risk… Read More