(Bloomberg) -- Deutsche Bank AG has drawn fresh criticism from the European Central Bank over foreign-exchange sales even after the lender completed an internal probe into past practices that led to initial changes.

An ECB supervisory team has told Deutsche Bank that it needs to improve oversight and checks at its business that pitches FX derivatives such as swaps to European companies, according to people familiar with the matter. 

The instruction comes months after Deutsche Bank changed some procedures following an internal probe — dubbed Project Teal — into allegations that it mis-sold FX derivatives to Spanish firms.

The ECB is now concerned that the lender still hasn’t been explaining the associated risks of the products sufficiently when selling them to clients, the people said, who asked not to be identified discussing private information.

Representatives for Deutsche Bank and the ECB declined to comment.

The lender’s shares reversed earlier gains to trade as much as 0.82% lower in Frankfurt.

Frustrating Clean-Up

The rebuke threatens to frustrate Chief Executive Officer Christian Sewing’s efforts to leave behind a history of scandals and regulatory run-ins more than half a decade after taking the reins at Deutsche Bank. While Sewing has resolved several legacy issues, new problems keep cropping up that leave him little choice but to abandon cost-cutting targets and spend instead on remediation.

Read More: Deutsche Bank’s Renewed Bid to Fix Controls Drives Cost Misses

The internal Project Teal probe resulted in the departure of several employees and the payment of tens of millions of euros in settlements, with at least one lawsuit arising from an unresolved case, Bloomberg has reported.

Deutsche Bank subsequently changed some wider controls and procedures, although it didn’t find evidence that other units followed similar practices, people familiar with the matter said at the time. The ECB and German banking watchdog BaFin criticized the probe as too narrow and lengthy, Bloomberg reported in February. 

BaFin Criticism

While regulators have since dropped the complaint, the ECB team that is assigned to Deutsche Bank for regular supervision has recently raised concerns over the FX derivatives practices, the people said about the latest criticism.

Read More: Deutsche Bank’s Regulators Criticize Its Internal Probe

The ECB rebuke over FX sales is at least the second time that a part of Deutsche Bank’s investment banking division — overseen by management board member Fabrizio Campelli — has attracted criticism from the top regulator. The ECB previously placed higher capital requirements on the lender’s leveraged finance business over alleged deficiencies in risk management.

(Adds share price movement in sixth paragraph)

©2023 Bloomberg L.P.