Deutsche Bank is fighting back

Shares in Deutsche Bank, Germany’s biggest bank, are fighting back on Tuesday after returning to trading following Monday’s holiday in Germany.

German investors enjoyed a three-day weekend to celebrate Reunification Day, but Deutsche’s shares have hit the ground running, jumping more than 2.9% after around an hour of trading on Tuesday morning. Shares are now trading a €11.91 each, a near three-week high.

Deutsche Bank’s shares have been in a world of hurt over the past few weeks after reports that the US Department of Justice is planning to hit the bank with a $14 billion fine for misselling mortgage-backed securities in the run-up to the financial crisis.

That fine is almost as big as the bank’s market value and led to fears that Germany may have to bail out the bank, something Berlin denied.

Fears were exacerbated on Friday by reports that a handful of hedge funds had reduced business with the bank to limit exposure to any upset. However, a reassuring letter from CEO John Cryan, as well as reports from Agence France Press that the bank and the DoJ agreed a settlement of roughly $5.4 billion, less than half the initial fine, bolstered the stock’s price.

As a result, shares rode a rollercoaster on the day, opening down by more than 8% before closing up by more than 8%. On Tuesday, shares have continued where they left off on Friday evening, as the chart below illustrates:

There has been no further word about how big the fine Deutsche Bank will actually pay will be, but the worst of the investor fears that gripped markets at the tail end of last week appear to have dissipated, and DB looks to be returning to some semblance of normalcy.

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