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November 12, 2013

Deutsche bank Hit By Legal Costs

“Deutsche Bank AG took a sharp hit to its third-quarter net profit and missed market forecasts as it added to provisions for legal disputes and saw its investment banking revenue and profit slide in a tough market environment. 

The high litigation provisions and weak investment-banking result masked progress the bank continues to make in shedding risky assets and cutting costs in its restructuring program.

During the quarter, the bank raised reserves for possible legal expenses by €1.2 billion ($1.65 billion) to €4.1 billion, with the bulk of the increase relating to potential legal costs in the U.S. for settling residential mortgage-related issues including an investigation by the Federal Housing Finance Agency.

It also earmarked €1.3 billion for unspecified potential litigation which it said had less than a 50% probability of happening and €600 million for potential mortgage repurchase demands. Deutsche Bank also disclosed that it is cooperating with investigations into potential manipulation of the foreign exchange market in which the German bank is the largest currency dealer.”

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Read full Wall Street Journal article here

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