UPDATE 1-Deutsche Bank freezes 2011 bonuses as settlements loom

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By Kathrin Jones

FRANKFURT, Sept 30 (Reuters) - Deutsche Bank has withheld some bonus payments from top executives as it awaits the outcome of a long list of legal and regulatory issues that it aims to clear before the end of the year, a senior bank offical said on Tuesday.

Germany's largest lender is striving to settle a number of probes before year-end, including those involving U.S. mortgage-backed bonds and the attempted manipulation benchmark interest rates, said the source, who declined to be named because he was not authorised to speak to the media.

Deutsche also aims to conclude settlement talks with U.S. authorities before year-end over dealings with blacklisted countries such as Iran, the source said.

Some variable compensation from 2011 will remain frozen until the bank's supervisory board led by Paul Achleitner assess legal and reputational risks originating that year, the source said, confirming a story first reported by newspaper Handelsblatt.

The supervisory board decided to freeze about 10 million euros ($12.6 million) in bonus payments in July as they were due to be payed in August, the source said.

Deutsche Bank declined to comment.

Co-Chief Executives Anshu Jain and Juergen Fitschen, Chief Financial Officer Stefan Krause and retail and commercial banking chief Rainer Neske would be affected by the freeze, as would several former executives including past-CEO Josef Ackermann.

Deutsche Bank launched a reform plan in 2012 to boost compliance functions after getting hit by a wave of post-crisis investigations. The bank has paid 5.6 billion euros in the past two years in fines and settlements and expects to pay another 3 billion in 2014.

($1 = 0.7926 euro) (Writing by Thomas Atkins; Editing by Georgina Prodhan and William Hardy)

FILED UNDER: Financials

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