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Deutsche Bank's hefty DOJ settlement to remain in limbo: Report

2016A statue is seen next to the logo of Germany's Deutsche Bank in Frankfurt, Germany.
Kai Pfaffenbach | Reuters

A report has raised concerns that Deutsche Bank could hang in limbo longer than many people had hoped.

More than a month after news first surfaced that the Department of Justice has asked the struggling German lender for a $14-billion settlement around its former sales practices regarding mortgage-backed securities, a Sky News report, citing a banking industry source, said the final decision on any fine would not likely come until after the November U.S. election.

The final size of a negotiated settlement is still unknown, though most industry-watchers expect it to be much lower than $14 billion.

Deutsche Bank declined CNBC's request to comment on the Sky News report. Regardless, analysts are taking the report seriously.

"I think it's quite realistic, to be honest. I think it could be the case," said Steven Gould, analyst at Natixis, which has a "sell" rating on Deutsche Bank.

He said continued uncertainty over the final settlement will hang over the bank, especially as the German firm's management will likely take a "cautious stance" during the bank's earnings results scheduled for this Thursday.

Two other major European banks, Barclays and Credit Suisse, also are under scrutiny for their sales of the securities, and in September, the Financial Times reported that the DOJ hopes to combine cases against Barclays, Credit Suisse and Deutsche Bank into a multibillion dollar settlement.

A senior banker told Sky News this week that if the DOJ wanted to settle with all three banks simultaneously, a deal would not likely come before the U.S. presidential election, the British news organization reported late Monday afternoon New York time.

Barclays, Credit Suisse and the Justice Department declined to comment.

Deutsche Bank shares briefly fell 3 percent in Frankfurt trade Tuesday. The U.S.-traded shares dropped more than 2 percent in opening trade before paring losses to trade about 1.2 percent lower.