Deutsche Bank paid $1.1m to secure the wealth management business of a senior Saudi royal, the Financial Times reported, citing an internal probe that led to two former staff being reported to criminal prosecutors.
The money transfers were arranged in 2011 and 2012, along with other perks, including an internship and a seminar at a Swiss ski resort, according to the results of an international probe, seen by the Financial Times.
The unnamed royal was a Deutsche wealth management client from 2010 to 2016, bringing up to €500m in assets.
This was an action by a small number of individuals who acted in breach of the bank’s policies"
According FT, an internal investigation between 2014 and 2016, code named Project Dastan, found the Deutsche employees involved were trying to retain the wealthy client and win additional business.
Deutsche gave an internship in its London legal department to a niece of the royal's financial adviser. The bank found it had paid for her travel and accommodation, in violation of its policies.
The bank made the internship offer after the Saudi adviser warned not doing so would "jeopardise the whole client relationship" and implied the client's cash might be moved elsewhere.
Some of the pay and perks violated Deutsche's policies on anti-corruption and gifts and entertainment, the probe found.
The scandal in the lender's wealth management division, which involved payments to the wife of the royal's financial adviser, highlights the legal and reputational risks to a unit that is central to the German bank's turnaround hopes
Deutsche Bank told Bloomberg it has since put in place measures to ensure there are no similar breaches of the lender's policies.
"This was an action by a small number of individuals who acted in breach of the bank's policies," a spokesperson said in a statement. "We caught it, reported it ourselves to regulators and the affected clients, dealt appropriately with the individuals, and made improvements to avoid something similar happening again."