UPDATE 3-Police spend second day searching Deutsche Bank HQ

Police searched Deutsche Bank's headquarters in Frankfurt for a second day on Friday over money laundering allegations linked to the Panama Papers and shares in the company fell to a record low.

The large volume of material being examined meant a search started on Thursday was still going on, a spokeswoman for the Frankfurt prosecutor's office said, adding that offices of board members were included but without giving further details.

Deutsche, Germany's biggest lender, said on Thursday it was cooperating with investigators and declined further comment on Friday. Deutsche Bank traded down 2.5 percent at 1040 GMT and have lost around half of their value this year.

The raid comes as Deutsche Bank tries to repair its tattered reputation after three years of losses and a list of financial and regulatory scandals.

Christian Sewing, appointed chief executive in April to help the bank rebuild, has trimmed its U.S. operations and reshuffled its management board, but revenue has continued to slip.

Investigators are looking into the activities of two unnamed Deutsche Bank employees alleged to have helped clients set up offshore firms to launder money, the prosecutor's office has said. The inquiries focus on events from 2013 to this year.

The prosecutor said on Thursday the investigation had been triggered after investigators reviewed information in the Panama Papers, consisting of millions of documents from Panamanian law firm Mossack Fonseca leaked to the media in April 2016.

Around 170 police officers, prosecutors and tax inspectors began the raid on Thursday, seizing written and electronic documents, though only one police car was visible outside the bank's headquarters early on Friday.

This week's events raise the stakes of a regularly scheduled meeting of the bank's supervisory board planned for Dec. 4.

Deutsche Bank's controls that aim to prevent money laundering have caught the attention of regulators on both sides of the Atlantic.

On Thursday, as the raids were ongoing, the vice chairman of supervision for the U.S. Federal Reserve, Randal Quarles, met Deutsche Bank management for an unrelated and previously scheduled appointment at the bank's headquarters, a spokesman for the Fed said. (Additional reporting by Pete Schroeder in Washington Editing by David Holmes and Keith Weir)

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