Deutsche Bank Shares Drop on Capital Raising Fears

FRANKFURT—Shares in Deutsche Bank AG fell sharply Monday, with investors spooked by the possibility of a capital increase ahead of a looming fine from the U.S. Department of Justice.

In early trading in Frankfurt, the bank's stock dropped more than 6% to touch a multiyear low of €10.625, before recovering some ground to trade at €10.72. The overall market was down about 1.5%.

The U.S. Justice Department has proposed that Deutsche Bank pay $14 billion to settle a set of mortgage-securities investigations stemming from the financial crisis, people familiar with the matter told The Wall Street Journal earlier this month.

Many investors doubt the Justice Department would levy a fine that size and Deutsche Bank said it had no intention of settling the claims "anywhere near" that figure.

However, analysts have noted that even a fine of $4 billion would raise questions about Deutsche Bank's capital position, potentially prompting a fundraising.

Write to Monica Houston-Waesch at nikki.houston@wsj.com

(END) Dow Jones Newswires

September 26, 2016 05:35 ET (09:35 GMT)

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