Legal costs slash Deutsche’s profits

Tim Wallace
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GERMAN giant Deutsche Bank was yesterday forced to cut its 2012 profit figures almost in half as it set aside hundreds of millions more euros to cover legal action and regulators’ investigations.

The bank did not give details of the extra €600m (£510m) provision but it is known to be under investigation relating to interbank lending rates like Libor, and mortgage lawsuits may also be to blame.

Deutsche Bank has now set aside €2.4bn to cover the bill, up €600m on earlier projections.

But the group’s contingent liabilities for legal costs have been cut by €500m in recognition of other legal costs being crystallised in the latest update.

Profits for 2012 now stand at €800m, down 43 per cent on previously published income figures.

The extra bill drags down the bank’s core tier one capital ratio from eight per cent to 7.8 per cent on a fully loaded Basel III basis.

But the bank’s planned dividend of 0.75 per share remain unchanged.

Deutsche’s shares edged up slightly yesterday, rising 1.4 per cent to close at €32.44.