FRANKFURT (Reuters) - German financial watchdog Bafin praised improvements at Deutsche Bank under chief executive John Cryan on Tuesday but a source close to the regulator said it was looking into money-laundering allegations involving bank clients in Russia. “We see the bank as fully on the right track,” Bafin’s banking supervision head, Raimund Roeseler, told the regulator’s annual news conference. “The bank initiated appropriate measures to resolve the problems that we identified,” he added. Cryan, a Briton who took the helm of Germany’s flagship lender in July, has been working to restructure the business and end a raft of regulatory and legal tangles that helped push it to a record 7 billion euro (6 billion pounds) loss last year. However, Bafin has started an audit following suspicions that surfaced last year of money laundering involving Deutsche Bank clients in Russia, a source close to the regulator said. “If these sorts of accusations are in the air, we don’t just sit in the gallery and watch; we do something of course,” Roeseler said, when asked if Bafin was investigating the Russian allegations. Deutsche Bank declined to comment. A source familiar with the matter told Reuters in December that Deutsche Bank had found a total of $10 billion of suspicious trades, including $6 billion in so-called “mirror trades” that may have allowed Russian customers to move money from one country to another without alerting the authorities. Deutsche Bank had shared the information with authorities, the source had said at the time. The U.S. Department of Justice has also been investigating the trades, which banking observers said posed the threat of high fines. Bafin had started a number of probes in recent years into Deutsche Bank’s role in the manipulation of benchmark interest rates such as Libor as well as foreign exchange rates. The Libor probe had been completed and the foreign exchange probe is expected to conclude in the summer, Bafin said. “We are relaxed about this review. The bank has started a large number of steps in recent months to address the problem areas,” Roeseler said. Bafin and British watchdog FCA have criticised Deutsche Bank’s control systems to prevent money laundering and other illegal business practices, but the lender has been working to tackle problems there, too, Bafin President Felix Hufeld said. “As of today, there are no further investigations either from our side or the FCA’s,” he said. Hufeld last year demanded that Deutsche Bank improve its control systems, and Germany’s biggest lender has since pledged substantial investment, particularly to upgrade the efficiency of its IT systems. Reporting by Jonathan Gould and Andreas Kroener; editing by Adrian Croft
German financial watchdog Bafin has praised the improvements that have been made under CEO John Cryan at Deutsche Bank, stating that the bank was on the right track; however, it is still investigating the money laundering allegations involving Deutsche Bank clients in Russia. The report states that “while there are no indications of criminal activity by any individual or institution with regard to these transactions, we believe they may be linked to Russian organized crime and therefore require further investig@@