Deutsche Bank (DB) - Get Report shares fell to a fresh all-time low Thursday after European antitrust regulators charged four regional lenders with taking part in a bond trading cartel that lasted at least seven years.
The European Commission did not name the banks alleged to have participated in the alleged cartel, and Deutsche Bank said it can't comment on the ongoing probe even as it said it was proactively co-operating with regulators, but investors clipped shares in the bank sharply lower following news of the investigation and last night's rate hike from the U.S. Federal Reserve.
"The Commission has concerns that at different periods between 2009 and 2015, the four banks exchanged commercially sensitive information and coordinated on prices concerning U.S. dollar supra-sovereign, sovereign and agency bonds, known as "SSA bonds"," the Commission said in a statement. "These contracts would have taken place mainly through online chatrooms."
Deutsche Bank shares were marked 6.3% lower from yesterday's close by mid-afternoon trading in Frankfurt and changing hands at €7.10 each, the lowest on record and a move that takes its year-to-date slump to around 55%.
"Deutsche Bank has proactively cooperated with the European Commission in this matter and does not expect a financial penalty," the bank said in an emailed statement to TheStreet. "As this is an ongoing investigation, we cannot comment further."
The EU probe, should it include Deutsche Bank, is the second major headline risk to hit the bank's shares in as many months, following news that prosecutors and tax inspectors raided its Frankfurt headquarters as part of an ongoing probe into money laundering allegations linked to the publication of the Panama Papers.
The raid, which also included the offices of all of Deutsche Bank's board members, according to a Reuters report, is said to be focused on two unnamed bank employees alleged to have assisted clients in hiding money offshore between 2013 and 2018.
It also followed an allegation that Deutsche Bank was the unnamed "major European bank" that helped process around $150 billion in payments linked to the Danske Bank money-laundering scandal that was revealed earlier this year.
"As far as we are concerned, we have already provided the authorities with all the relevant information regarding Panama Papers," Deutsche Bank said in a statement provided to TheStreet at the time. "Of course, we will cooperate closely with the public prosecutor's office in Frankfurt, as it is in our interest as well to clarify the facts. In recent years, we have proven that we fully cooperate with the authorities - and we will continue to do so."
The twin headlines are the latest turmoil to sweep across Germany's largest lender, which has lost nearly two thirds of its market value since asking investors for an $8.5 billion capital increase in March 2017 following a multi-billion settlement with U.S. legal authorities linked to the mis-selling of mortgage bonds in the run-up to the global financial crisis.