BaFin “threatened to impose financial penalties” on Deutsche Bank if the lender doesn’t take specific measures to prevent money laundering and terrorist financing, according to a statement posted Friday on the German financial regulator’s website.
Deutsche Bank needs to make the adjustments by a mid-2023 deadline, The Wall Street Journal reported.
The warning comes as the regulator apparently has seen a slower-than-expected response to orders it issued the bank in September 2018 and February 2019.
“We are fully aligned with BaFin on the necessary measures and have already completed a large proportion of them,” a Deutsche Bank spokesman told Bloomberg in an email. “We have, and will continue, to invest the resources and management attention necessary to improve our control environment and to meet regulatory expectations.”
The Deutsche spokesman said Friday’s warning, which the bank initially received Sept. 28, contains “no new findings.”
Deutsche hinted as recently as July that it has boosted — by several hundred million euros — its budget to improve controls, Bloomberg reported. That effort to get on regulators’ good side had generally encompassed €1 billion a year, according to the wire service. But more recently, the bank’s increased allotment for controls has factored in to its difficulty in reaching certain expense targets as part of the bank’s ongoing campaign to restructure and cut costs, Bloomberg reported.
Friday’s warning also comes roughly 18 months after BaFin expanded the role auditor KPMG plays in monitoring Deutsche’s compliance with what BaFin perceives as continued deficiencies in the bank’s controls.
