Deutsche Bank Sees $1.1 Billion Quarterly Legal CostsElisa Martinuzzi and Shane Strowmatt
Deutsche Bank AG, Germany’s largest lender, said it expects to log 894 million euros ($1.13 billion) of litigation costs in the third quarter.
The figure relates to “a number” of items that are largely not tax-deductible, the Frankfurt-based bank said yesterday in a statement, without giving details. A spokesman for the firm declined to elaborate on the costs.
Deutsche Bank has yet to resolve probes into its role in industrywide attempts to manipulate benchmark interest rates and currency markets, and also faces lawsuits alleging it failed to make adequate disclosure of U.S. mortgage-backed securities. The announcement brings Deutsche Bank’s legal costs for the first nine months to about 1.36 billion euros.
“It’s within expectations,” said Dirk Becker, an analyst at Kepler Cheuvreux in Frankfurt. “Deutsche Bank gave guidance for 3 billion for 2014 and in the first half of the year we basically had nothing, so it was always clear it’ll come back-end-loaded in the second half.”
The company’s legal costs, which totaled 3 billion euros last year, are hampering efforts to build capital and increase returns for investors. The lender raised its reserves for litigation expenses by 450 million euros to 2.2 billion euros at the end of the first half.
Deutsche Bank’s American Depositary receipts rose 0.6 percent to close yesterday at $31.94. The company is scheduled to report third-quarter results on Oct. 29.