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Deutsche rises on U.S. mortgage fraud deal, European shares steady
December 23, 2016 / 5:17 PM / 9 months ago

Deutsche rises on U.S. mortgage fraud deal, European shares steady

* STOXX 600 flat at close

* Deutsche up after settling mortgage fraud claim

* Credit Suisse turns lower, Barclays falls on lawsuit

* NN Group, JCDecaux gain on merger deals (Recasts, adds detail and updates prices at close)

By Kit Rees and Alistair Smout

LONDON, Dec 23 (Reuters) - European shares were steady on Friday with the focus on lenders after Deutsche Bank and Credit Suisse settled mortgage securities fraud suits in the United States, and Italy’s Monte dei Paschi agreed to a bailout.

The STOXX Europe 600 was flat at its close and unchanged for the week, but the index still on track for its best month since October 2015.

Deutsche Bank trimmed early gains to end 0.3 percent higher, outperforming a slightly negative European banking index , after it agreed to a $7.2 billion settlement with the U.S. Department of Justice (DoJ) over its sale of toxic mortgage securities before the 2008 financial crisis.

U.S. authorities had been seeking nearly twice as much.

Deutsche’s shares have risen nearly 80 percent since touching record lows in September.

Credit Suisse turned negative after early gains, while RBS , which is also being investigated, rose 1.4 percent on hopes that its final settlement might be lower than expected.

However, Barclays underperformed after failing to reach a settlement. It was down 0.9 percent after the DoJ launched a lawsuit against the bank over its sale of mortgage-backed securities. The bank said it rejected the complaint.

“(Gains for) Deutsche Bank shares suggests relief at a good result and the affair being closed,” Accendo Markets head of research Mike van Dulken said in a note.

“Barclays’ (fall) indicates some uncertainty about what it eventually ends up paying.”

Britain’s FTSE 100 closed 0.1 percent higher.

Italian lenders rose 0.6 percent after the Italian government agreed to bail out Monte dei Paschi. The bank’s shares will remain suspended until the conditions of a state bailout become clear.

Shares in Telecom Italia rose 4.5 percent after a report that Italy was considering a plan for its state lender to buy a stake in the telecoms company to counter the ambitions of French businessman Vincent Bollore.

Dutch insurer NN Group rose 3.7 percent after it reached an agreement to buy Delta Lloyd. NN had nudged up its unsolicited offer by 1.9 percent to 2.5 billion euros.

NN Group said the deal would cement its leading position in life insurance in the Netherlands, increase assets under management by 60 billion euros, and lead to “double-digit” dividend increases starting in 2018.

Advertising firm JCDecaux rose 3.4 percent on its merger of activities with Top Media, strengthening its presence in Panama, Guatemala, Costa Rica and El Salvador. (Reporting by Kit Rees and Alistair Smout; editing by David Clarke)

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