Tags: Deutsche Bank | profit | earnings | legal costs

Deutsche Bank Profit Falls on Legal Costs After Record Fine

Sunday, 26 April 2015 10:39 AM

Deutsche Bank AG said first-quarter profit fell by half after the lender booked legal costs from a record fine for rigging interest-rate benchmarks.

Net income fell to 544 million euros ($591 million) from 1.1 billion euros a year earlier, the Frankfurt-based company said in a statement Sunday. That’s higher than the 256 million-euro average estimate of four analysts surveyed by Bloomberg after Deutsche Bank said it would book 1.5 billion euros in legal costs in the quarter that saw near-record revenue.

Deutsche Bank got a boost from trading just as Co-Chief Executive Officers Anshu Jain and Juergen Fitschen prepare to outline a strategic overhaul of the firm. The company, which runs Europe’s largest investment bank, plans to cut its stake in Postbank consumer business to a minority, shrink the securities unit and cut back the number of countries in which it operates.

Deutsche Bank’s earnings benefited from “the boost quantitative easing has given trading businesses,” Morgan Stanley analyst Huw van Steenis said in a note before today’s release. “Overall headwinds to an improving leverage ratio remain intense from litigation and regulation for Deutsche Bank.”

The company was fined $2.5 billion for manipulating interest-rate benchmarks by four regulators in the U.S. and the U.K. on Thursday. The penalty is the biggest yet that Deutsche Bank has had to pay for misconduct and comes on top of the 7.1 billion euros the lender has spent on litigation in the last three years.

Deutsche Bank’s common equity Tier 1 capital ratio, a key measure of financial strength, fell to 11.1 percent from 11.7 percent at the end of December, it said in the statement. Its leverage ratio fell to 3.4 percent from 3.5 percent at the end of 2014.

The firm still faces legal challenges including probes into foreign exchange, mortgage- and asset-backed securities dealings and alleged U.S. sanctions violations that could damp future earnings.

Deutsche Bank will present details of the reorganization Monday.


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Deutsche Bank AG said first-quarter profit fell by half after the lender booked legal costs from a record fine for rigging interest-rate benchmarks.
Deutsche Bank, profit, earnings, legal costs
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2015-39-26
Sunday, 26 April 2015 10:39 AM
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