The investigation centres on allegations that Germany's biggest lender helped clients set up off-shore companies in tax havens to “transfer money from criminal activities”, the Frankfurt prosecutor's office said in a statement.

Some 170 police officers and investigators from the prosecutors' office were searching six of the bank's premises in and around the city, it added.

Deutsche Bank confirmed the raids and said it was “fully cooperating” with the authorities.

“The case is related to the Panama Papers,” it added.

The Panama Papers scandal that erupted in 2016 with a massive data leak from Panama legal firm Mossack Fonsenca exposed large-scale tax evasion, laying bare how the world's wealthy and powerful stashed their assets in offshore businesses.

Deutsche Bank was among hundreds of financial institutions whose names cropped up in the media reports about the Panama Papers.

The Frankfurt prosecutors said their probe was focusing on two Deutsche Bank employees aged 50 and 46, as well as “several” unnamed senior staff members.

Based on information from the Panama Papers, they are accused of “failing to report suspicions of money laundering” linked to offshore firms involved in tax evasion “even though there was sufficient evidence” to suggest illegal activity, prosecutors said.

Shares in Deutsche Bank fell 2.7 percent to 8.36 euros by 11am CET, against a DAX blue-chip index up 0.6 percent.

'Lax money laundering checks' 

The raids are the latest embarrassment for embattled Deutsche Bank, which has repeatedly been rapped by regulators for lax money laundering controls.

In September, Germany's financial supervisor BaFin took the unusual step of embedding auditors from KPMG at Deutsche to monitor the bank's progress in battling illegal transactions such as money laundering, terrorist financing and dealings with organized crime.

In 2017, Deutsche already had to pay a fine of almost $630 million after an investigation by British and American authorities into laundering of money originating in Russia.

Soon afterwards, the US Federal Reserve ordered a further fine of $41 

million over gaps in the bank's money laundering surveillance.

Deutsche Bank has also come under scrutiny over its activities as a 

correspondent for scandal-plagued Danske Bank, Denmark's largest lender.

Citing people familiar with the matter, Bloomberg News had reported that 

Deutsche was the unnamed bank a Danske whistleblower said had handled almost $150 billion of suspect transactions originating in the Danish firm's Estonian branch.

Deutsche Bank is in the throes of a major restructuring plan, with 7,000 jobs to go by the end of 2019.

The bank had said at the end of October that it expects to report a net 

profit for the first time since 2014, not least because no legal settlements 

in the hundreds of millions or even billions were on the horizon as in 

previous years.