German criminal probe on Deutsche Bank zeroes in on tiny unit which was barely profitable and put up for sale in 2016

Reading Time: 2 minutes

The business at the core of Deutsche Bank’s latest money laundering probe was tiny, barely profitable and earmarked for sale since early 2016, according to several people briefed on the matter.

The Financial Times reports that three people familiar with the matter told the it that Deutsche Bank decided in March 2016 to put its GTS business up for sale.

At the time, the business was running trusts in low-tax locations such as Guernsey and the Virgin Islands and generating an annual revenue of less than €10m — a tiny fraction of Deutsche Bank’s overall annual revenue.

It contributed less than €1m in operating profit a year. The German bank announced a deal to sell its GTS unit to Bermuda-based lender N.T. Butterfield & Son in October 2017, while keeping the terms of the deal private.

The sale was completed by the end of March 2018.

Deutsche Bank declined to comment. Butterfield confirmed the purchase of GTS but declined to comment further.

One of GTS’s legal entities was a Road Town, British Virgin Islands-based entity dubbed Regula Limited, which, according to people familiar with the matter, is at the centre of an ongoing money laundering investigation by Frankfurt prosecutors. 

Regula was named in the 2016 leak of documents on offshore tax havens at the Panama-based law firm Mossack Fonseca — dubbed the Panama Papers — and in 2016 it operated trusts for about 900 clients with about €311m in assets. Regula, which could not be reached for comment, accounted for about half of the GTS business. The vast majority of Regula clients were based in the Asia-Pacific region and Latin America, with only a fraction located in Germany.

Read more on the Financial Times 


Once you're here...