Deutsche Bank Said Near $1.5 Billion Settlement on Libor Deutsche Bank AG investors reacted with relief as the lender moved closer to reaching a settlement in the global interest-rate rigging probe. Germany’s largest lender is set to pay more than $1.5 billion this month after an investigation into how traders colluded to rig the London interbank offered rate and related benchmarks to profit from their own derivatives bets, according to a person familiar with the matter, who asked not to be identified because the talks are private. The unit expected to plead is Deutsche Bank Group Services, another person said. The U.K. unit is one of the lender’s main employers. A settlement would remove a key legal threat that has haunted Deutsche Bank co-Chief Executive Officer Anshu Jain since 2012. The Libor scandal has forced at least one CEO, Barclays Plc’s Robert Diamond, to resign and cost banks billions of dollars in penalties. While Deutsche Bank’s fine would exceed those paid by any of the other seven banks that have settled with U.S. and U.K. regulators, analysts said it was in line or only marginally higher than their estimates. The fine is “manageable and Deutsche Bank will be pleased to get it out of the way,” said Christopher Wheeler, a financial analyst at Atlantic Equities in London. Even so, it’s “seen as a reminder of the bad behavior of the investment bank which is linked to Jain,” the former head of the unit. Deutsche Bank shares rose as much as 1.2 percent and were up 0.9 percent at 33.30 euros at 1:34 p.m. in Frankfurt. They have gained about 33 percent this year. Uncertainty Gone “The uncertainty is gone,” said Stefan Bongardt, an analyst at Independent Research GmbH in Frankfurt, who has a hold recommendation on the stock. “For Deutsche Bank, Libor is one of the last big legal disputes. There could be relief in the market even if it’s a bit over expectations.” The penalties are expected to wrap up probes by the U.S. Justice Department, the Commodity Futures Trading Commission, New York’s Department of Financial Services and the U.K.’s Financial Conduct Authority, according to one of the people. Spokesmen for the Department of Justice, the CFTC, FCA and New York’s DFS declined to comment. Deutsche Bank said in a statement that it will “continue to work with the authorities that are reviewing interbank offered rates matters.” The talks were reported earlier by the New York Times. Deutsche Bank first said it was under investigation over Libor manipulation at its investment bank in 2012, and that it had received requests for information from U.S. and European regulators for the period 2005 to 2011. Libor-Rigging Several banks have been probed for rigging the London interbank offered rate, a key interest rate tied to instruments such as mortgages, student loans and credit cards. Deutsche Bank, one of more than a dozen Libor-panel banks, is accused of giving false information in response to a daily survey by the British Bankers’ Association, which determined the daily rate for Libor in a variety of currencies, including the Euro, the U.S. dollar and the yen. Rabobank Groep of the Netherlands, Barclays, UBS Group AG, Lloyds Banking Group Plc and Royal Bank of Scotland Plc have already reached Libor-manipulation settlements. The penalty said to be under discussion for Deutsche Bank would exceed previous fines. In 2012, UBS was penalized $1.5 billion and its Japanese unit entered a guilty plea. At Barclays, Diamond stepped down as CEO the same year after the London-based lender paid 59.5 million pounds ($87 million) to the U.K. regulator and $360 million to U.S. authorities. Rabobank Fine The following year, RBS paid about $600 million to settle U.K. and U.S. probes, while Rabobank Groep paid 774 million euros, the equivalent of $1.1 billion at the time. Last year, Lloyds settled with U.S. and U.K. authorities for $383 million. Deutsche Bank said last year it was in discussions with some authorities about a resolution of the global probe. The German lender previously was fined 725 million euros ($773 million) by the European Union for manipulating yen Libor and the euro interbank offered rate. Bafin, Germany’s financial market regulator, has also been scrutinizing Deutsche Bank’s role in setting Libor, including what Jain knew about the behavior, people with knowledge of the situation have said. Sabine Reimer, a spokeswoman for Bafin, declined to comment to Bloomberg News. The investigation hasn’t found any evidence Jain knew about or participated in possible interest-rate manipulation, German newspaper Handelsblatt reported in December. Bafin has also concluded that other board members didn’t know about or take part in any such activity, Handelsblatt said. Diamond Exit “Things have changed,” said Alevizos Alevizakos, an analyst at Keefe Bruyette & Woods in London with an underperform rating on Deutsche bank shares. “Three years ago, when the first Libor settlement came, Diamond lost his job. Since then, we moved a long way actually.” Deutsche Bank set aside 3.6 billion euros in legal and operational risk provisions at the end of December. The bank doesn’t provide details on the reserves. Over the last three years, the bank’s litigation expenses totaled about 7.1 billion euros. The Libor investigation is one a handful of global inquiries into how banks may have rigged benchmarks that also include foreign exchange and precious metals. In November, six global banks paid a combined $4.3 billion to settle civil claims they rigged foreign exchange rates with the CFTC and the U.K.’s FCA. Several banks are still waiting to settle possible criminal claims for FX rigging with the Justice Department.