While money-laundering suspicions stem from the 2016 disclosures known as the Panama Papers, the investigation covers the five-year period from 2013 to 2018, a spokeswoman for Frankfurt prosecutors said.
FWIW: Deutsche has been rocked by problems and was the only major global bank to do business with Trump in recent years.
The Panama Papers are a trove of documents from a law firm that handled shell companies for thousands of the rich and powerful around the world.
Danske is under investigation for suspicious payments totaling 200 billion euros from 2007 onwards and a source with direct knowledge of the case has told Reuters Deutsche Bank helped to process the bulk of the payments.
Bank officials say the company is cooperating with investigators.
Deutsche Bank (DB), which the publication notes has spent $18 billion on "fines and legal disputes" over the past ten years, reportedly has multiple links to the Panama Papers scandal.
This morning police vehicles surrounded the Frankfurt headquarters of Deutsche Bank.
Deutsche and Danske banks are not the first to be stung following revelations contained within the Panama Papers.More news: House Democrats nominate Pelosi to lead them
The main suspects in the probe focused on a unit in the British Virgin Islands that processed €311 million (NZ$517 million) in 2016 alone were two bank employees identified by their ages - 50 and 46.
They also accused the bank's employees of allegedly neglecting their duties of reporting suspicious activity of clients involved in tax evasion schemes.
Weaknesses in Deutsche Bank's controls that aim to prevent money laundering have caught the attention of regulators on both sides of the Atlantic.
The news comes as Deutsche Bank tries to fix its tattered reputation after three years of losses and a drumbeat of financial and regulatory scandals.
"These flaws allowed a corrupt group of bank traders and offshore entities to improperly and covertly transfer more than $10 billion out of Russian Federation", the regulators said.
Analysts say that because these transactions can be lucrative, banks have few incentives to do more than the minimum required by law to check on the identity of a bank.
The prosecutor suspects further that proceeds from criminal activity were transferred into Deutsche Bank accounts without the bank flagging the transactions as potential money-laundering cases.
German prosecutors found no evidence of criminal wrongdoing, and the bank's top-level executives were deemed not to have been involved in the scandal.