UPDATE 1-German regulators probe Deutsche Bank accounts - sources
* Move comes after U.S. whistleblower raises allegations
* Probe centres on allegations of false valuations - sources
* Deutsche Bank declines to comment on probe
FRANKFURT, April 4 (Reuters) - Germany's Bundesbank and financial watchdog Bafin are conducting an in-depth probe of Deutsche Bank AG's accounts over allegations that it failed to correctly value a derivatives portfolio, sources familiar with the investigation said.
Two of the sources said on Thursday that Germany's central bank was reacting to accusations that Deutsche Bank had incorrectly valued credit derivatives from 2007 through 2010, allowing it to hide as much as $12 billion in losses.
"This is a routine investigation. There is no prejudgement," one of the people, who is close to the investigation, told Reuters, saying the regulators were starting with the assumption that Deutsche Bank's accounts were in order.
The person said the probe would include trips to New York to meet the people who had made the allegations. "But the investigators have not been there yet."
Deutsche Bank has said the allegations were unfounded and declined to comment on the investigation.
The Bundesbank said it could not provide information on measures that affect individual institutions.
"Generally, you can assume that we pursue any allegations that are made to assess their validity," a Bundesbank spokeswoman said. Bafin declined to comment.
The Financial Times reported in December that three former Deutsche employees had filed complaints with U.S. securities regulators claiming the bank failed to recognise up to $12 billion of unrealised losses during the financial crisis.
At the time, Deutsche Bank said the allegations were more than two and a half years old and that an investigation by a law firm had found them to be wholly unfounded.
Reuters had previously reported on a Sarbanes-Oxley whistleblower action filed against Deutsche Bank in May 2010, alleging that some of the assets in a derivatives portfolio may have been improperly valued in order to hide trading losses.
In an internal presentation given by Bill Broeksmit, head of risk and capital optimisation at Deutsche Bank in June 2011, Deutsche Bank said it had been able to unwind a large portion of its credit derivative portfolio without taking heavy losses, a sign that some buyers had broadly accepted Deutsche's view on how to value certain assets.
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