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Morgan Stanley estimates Deutsche settlement over U.S. fine at $6 bln

Reuters - UK Focus

LONDON, Sept 30 (Reuters) - Deutsche Bank (LSE: 0H7D.L - news) could pay about $6 billion to settle charges related to its sale of toxic mortgage bonds before the financial crisis, analysts at Morgan Stanley (Xetra: 885836 - news) estimated in a note to clients.

Germany's largest lender said about two weeks ago it would fight a $14 billion demand from the U.S. Department of Justice to settle claims it missold the securities.

Talk of a smaller-than-expected fine bounced Deutsche Bank shares sharply off their lows on Friday to end the day up 6.4 percent. Its U.S. listing was up more than 12.6 percent.

A $6 billion fine would keep Deutsche Bank's fully loaded common equity tier 1 ratio above 10.5 percent. Morgan Stanley suggested a settlement would be agreed before the U.S. presidential election.

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An agreement between Deutsche and the U.S. Department of Justice (DOJ) could be announced in the next couple of days, the AFP reported, citing sources.

Credit Suisse (LSE: 0QP5.L - news) and Barclays (LSE: BARC.L - news) are reported to be in mortgage settlement talks with the DoJ. (Reporting by Vikram Subhedar; Editing by Ruth Pitchford)