The U.S. Justice Department and the Manhattan District Attorney's office are investigating the banks for allegedly using U.S. branches to move billions of dollars in Iran-linked transactions, according to the report, citing unnamed law enforcement officials.

The investigation into Deutsche Bank is at an early stage and so far there is no suspicion the Germany-based institution moved money on behalf of Iranian clients through American operations after 2008, when a policy loophole allowing such maneuvering closed, the Times reported.

Deutsche Bank decided in 2007 it would "not engage in new business with counterparties in countries such as Iran, Syria, Sudan and North Korea and to exit existing business to the extent legally possible," a spokesman told Reuters on Saturday. He declined to comment further.

The Manhattan District Attorney's office and U.S. Justice Department declined to comment. The U.S. Treasury Department did not immediately respond to a request for comment.

The report of the Deutsche Bank (DBKGn.DE) probe came days after a settlement for $340 million with New York's banking regulator and Britain's Standard Chartered Plc (STAN.L). The Manhattan District Attorney and federal authorities have not yet settled their probes of the bank.

That deal with New York Superintendent of Financial Services Benjamin Lawsky was done without agreement with the Manhattan District Attorney's office and federal authorities.

Reuters has learned that Lawsky ignored the entreaties of federal regulators to drop his own action in favor of a single, global settlement. Although winning a larger settlement than many thought possible, others say Lawsky's tactics have alienated federal officials and could make it tougher for him to partner with them on future cases.

Since 2009 the Manhattan District Attorney, Treasury Department, Justice Department and other agencies have entered into settlements with a handful of foreign banks including Credit Suisse (CSGN.VX), Lloyds (LLOY.L) and most recently ING (ING.AS), totaling roughly $1.8 billion.

Authorities have said in the past other foreign banks are under investigation.

(Reporting by Eric Johnson; Additional reporting by Victoria Bryan, Philipp Halstrick and Karen Freifeld; Editing by Will Dunham)

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