Deutsche Bank will have enough capital to cover its looming settlement with the U.S. Department of Justice, according to S&P Global Ratings.
The agency on Friday reaffirmed its low-end investment-grade rating on Deutsche Bank credit, but more importantly addressed the most critical question for the German lender's future — whether it will be able to handle a payment it will have to make regarding its past practices related to mortgage-backed securities.
Various reports have said the starting figure for the settlement is $14 billion, a number likely to cripple Germany's biggest bank. There was speculation last week — shot down quickly — that that number would be close to the $5.4 billion the bank has set aside.
S&P figures the final number will be somewhere above that $5.4-billion figure, but "materially smaller" than the $14-billion figure.