Deutsche Bank (NYSE:DB) and its U.S. affiliates have been fined $186 million by the Federal Reserve. The German lender has been accused of failing to implement adequate controls to address money laundering issues. In addition, the company is also charged with failing to make significant strides to comply with consent orders issued in 2015 and 2017.
These consent orders were related to Deutsche Bank’s improper internal controls and governance processes concerning its relationship with the Estonian branch of Danske Bank. It is worth mentioning that DB was previously fined $16 million in 2020 for money-laundering violations related to its work with Danske Bank.
The Fed expects Deutsche Bank to prioritize addressing these issues to avoid further penalties. In response, Deutsche Bank stated its commitment to addressing the shortcomings and maintaining strong risk management programs in the near future. The bank also mentioned that it has sufficient provisions to cover the fine.
Is DB a Good Stock to Buy?
Over the past years, Deutsche Bank has been under scrutiny from regulators for various issues, including money laundering and financial misconduct. The accumulation of fines and penalties has put a strain on the bank’s financial stability. Thus, the bank is under pressure to strengthen its risk management practices in order to win back investor confidence.
DB stock has received eight Buy, six Hold, and two Sell recommendations for a Moderate Buy consensus rating. Further, analysts’ 12-month average price target of $15.18 implies 34.93% upside potential from current levels. The stock is down about 1% year-to-date.
