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Deutsche Bank had a not terrible year. Actually, it was even better than that: It’s topped analysts’ estimates in each of the first three quarters, and actually made money in two of the three, including €182 million in the third, when the aforementioned analysts expected it to lose €114 million. All of this is quite surprising enough, but even more surprising is that all of those profits and all of that outperformance was driven by its investment bank. Can you imagine such a thing? Deutsche’s hapless, useless, hideous investment bank earning money rather than fines? It beggars belief.

Actually, no, wait: There’s a perfectly reasonable explanation. And it doesn’t even involve you-know-who!

Deutsche believes that some of its staff knowingly sold inappropriate or unsuitable products to customers who may not have been able to understand and shoulder the risk they were taking with these positions, the people said. The German lender is not just looking at a few isolated cases, but at what appears to be a broader pattern of misconduct over several years, the people said.

Project Teal is also looking into allegations that there was collusion between Deutsche employees and staff at some of the clients who bought the inappropriate products. One suggestion being explored is that the two sides shared some of the proceeds of the transactions, the people said….

Deutsche reports its full-year results on February 4 when [CEO Christian] Sewing will update investors on his cost-cutting programme.

But will we be able to hear him over the sirens?

Deutsche probes alleged mis-selling of investment banking products [FT]



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