Monday 25 September 2017

Deutsche Bank cuts profits for 2012 as costs on US mortgage lawsuits rise

Nicholas Comfort

DEUTSCHE Bank, continental Europe's biggest bank, cut its reported profit for 2012 after setting aside additional money to cover legal costs linked to US mortgage lawsuits and other regulatory probes.

The company increased the reserves by a third to €2.4bn, lowering 2012 profit after tax by about €400m to €291m, the Frankfurt-based bank said.

The firm reiterated its dividend and capital targets. Christian Streckert, a spokesman, declined to give further details on what prompted the decision.

The world's biggest banks are facing a series of regulatory probes and lawsuits linked to the alleged manipulation of benchmark interest rates as well as the mis-selling of products such as interest-rate derivatives.

Deutsche Bank said in October it's a defendant in "numerous" civil suits as an issuer or underwriter in residential mortgage-backed securities.

"Deutsche Bank has had to be very careful about litigation given that they're really in the firing line from investors and regulators on this," said Christian Hamann, an analyst at Hamburger Sparkasse who is advising clients to sell the shares.

"They were probably too optimistic when they presented the preliminary numbers, but one can see from the share price that the market isn't concerned as the targets were confirmed."

Deutsche Bank shares climbed 1.2pc to €32.38 in morning trade in Frankfurt, partly reversing three days of losses and valuing the firm at €30.1bn. The Stoxx 600 Banks Index rose 0.7pc as European policy makers weighed options for keeping Cyprus in the euro area.

(Bloomberg)

Irish Independent

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