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Deutsche Bank shares slide as US Justice Department deal appears elusive

How could Germany rescue Deutsche Bank?

Shares of Deutsche Bank were back in the red on Monday morning, after the embattled lender failed to announce a much-anticipated reduced settlement with U.S. authorities.

Investors had been hoping that Deutsche Bank and the U.S. Justice Department (DOJ) would settle a number of investigations related to mortgage securities over the weekend.

However, the lack of such announcement sent shares in the bank sliding nearly 3 percent by 9.00 a.m. London time on Monday morning, dipping down to around 11.75 euros per share. The stock weighed on the German DAX which was trading in negative territory and the wider banking sector in Europe was down 1.14 percent.

German newspaper Bild am Sonntag reported that bank CEO John Cryan had failed to come to an agreement with senior representatives of the U.S. Department of Justice in a meeting late Friday. Sources confirmed the lack of a deal to CNBC but the bank declined to comment when contacted.

Martin Leissl | Bloomberg | Getty Images

The perception is that Deutsche Bank needs to raise cash after the U.S. Justice Department (DOJ) suggested it pay $14 billion to settle a number of investigations. Initial worries about Deutsche Bank actually surfaced earlier in the year, with investors detailing concerns over its exposure to the energy sector and a possible cash crunch.

The bank has repeatedly defended itself over recent weeks, however, telling CNBC that there is "no reason to worry" and that the bank had a "comfortable cushion." Deutsche Bank's stock has slid over 48 percent so far this year and the cost of insuring exposure to its debt has risen sharply. It has come under pressure from aggressive short-selling, notably from some large hedge funds.

The recent saga surrounding Germany's biggest bank follows a report late last month that it was close to a $5.4-billion dollar settlement with the Justice Department. However, the lack of an official announcement quashed rumors of the deal and the latest negotiations look to be another setback.