Deutsche Bank (DBKGn.DE)(DB.N) said on Friday it will pay $1.9 billion to settle claims that it defrauded two U.S. government-controlled companies in the sale of mortgage-backed securities before the 2008 financial crisis.
The sum, equal to 1.4 billion euros, is the second-largest settlement disclosed in litigation brought by the Federal Housing Finance Agency covering allegations that Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) were deceived into buying debt whose risks had been hidden.
The lawsuit, which accused the German bank of misleading Fannie Mae and Freddie Mac, America's biggest providers of housing finance, to buy $14.2 billion in mortgage-backed securities was one of 18 that the FHFA filed in 2011 against financial institutions.
Deutsche Bank said in a statement on Friday that it had exited the businesses at the heart of the housing suit and had improved its controls.
Germany's biggest bank also said it was working to resolve a raft of other legal and regulatory problems.