Deutsche Bank is to axe bonuses for senior staff as part of its desperate efforts to pay for a potential $14bn (£11.2bn) legal settlement with American regulators.

John Cryan, the German bank’s Yorkshire-born boss, warned top bankers this month that their bonuses would be seized to help foot the bill for the mis-selling of sub-prime mortgages.

A handful of top-performing executives will receive “retention cheques” — much smaller sums that will be paid out over several years. Junior staff will still receive a bonus, but on a far smaller scale.

“The fine could be partly paid for by bonuses,” said one senior insider.

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