Deutsche Bank shares resumed falling today after recovering from a record low at the end of last week, as hopes faded of a swift deal with US authorities over a multi-billion dollar penalty.
The German lender is throwing its energies into reaching a settlement before next month's US presidential election, with the Department of Justice demanding a fine of up to $14 billion for misselling mortgage-backed securities.
Its shares did not trade in Germany today because of a public holiday, but its US-listed stock was down around 2.8% earlier.
The threat of such a large fine has pushed Deutsche shares to record lows, and a cut-price settlement is urgently needed to help restore confidence in Germany's largest lender.
A media report late on Friday that Deutsche and the US DOJ were close to agreeing a much lower penalty of $5.4 billion lifted the stock 6% higher, but that report remains unconfirmed.
The Wall Street Journal reported yesterday that the bank's talks with the DOJ were continuing.
Details are in flux, with no deal yet presented to senior decision makers for approval on either side, the paper said, citing people familiar with the matter.
"Clearly, so long as a fine of this order of magnitude ($14 billion) is an even remote possibility, markets worry," UniCredit Chief Economist Erik F Nielsen wrote in a note yesterday.
Ratings agency Moody's said it would be positive for bondholders if the lender could settle for around $3.1 billion, while a fine as high as $5.7 billion would dent 2016 profitability but not significantly impair the bank's capital position.
