(Bloomberg) -- Deutsche Bank AG appeared to win the support of a high-ranking central bank official on Thursday who said the kind of business that prompted raids last week at Germany’s largest lender is largely a thing of the past.
The comments come as Deutsche Bank officials try to contain the fallout from two recent money-laundering probes that pushed its shares to new lows. Its Frankfurt headquarters were raided last week, days after it was drawn deeper into a separate money laundering scandal at Danske Bank A/S. Internal probes have found no wrongdoing, a person familiar with the matter said Thursday.
“The most recent events represent the lagged effects of previous business practices and organizational weaknesses,” Joachim Wuermeling, a board member of Germany’s central bank, said when asked about the raids. “In our role as supervisors, we stick to facts and figures. And by that, I don’t mean the number of police cars, but capital requirements, risk management and business models.”
Wuermeling, who also sits on the European Central Bank’s supervisory board, the region’s top banking watchdog, said he couldn’t comment on a specific investigation or bank. Still, in what may have been a veiled reference to Deutsche Bank, Wuermeling said there were "positive developments in the German banking landscape over the past few months" and supervisors give lenders credit when they make progress.
If TV footage -- like that of last week’s raid -- can make markets “jittery,” that’s a reason for concern, he said.
Deutsche Bank shares hits fresh lows after the raids, closing below 8 euros on Thursday, as investors worry the recent scandals may undermine an effort by Sewing to restore revenue growth and profitability. The bank doesn’t plan to put more money aside for two probes after internal reviews found no wrongdoing, a person familiar with the matter said, asking not to be identified in discussing internal deliberations.
Sewing has continued a push to improve controls since taking over in April. That same month he appointed a new chief operating officer, Frank Kuhnke, whose responsibilities include improving Deutsche Bank’s procedures in vetting clients.
“Experience since the financial crisis has shown that even large institutions are capable of resolutely changing track,” Wuermeling said. “But this takes time.”
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