Profits slump on legal costs
October 29, 2013
Deutsche Bank's net profit in the third quarter slumped to 41 million euros ($56.4 million), down from 747 million euros in the same period last year, Germany's biggest lender announced Tuesday.
The 94 percent drop was the result of substantial litigation charges and reduced profits in investment banking, co-CEOs Jürgen Fitschen and Anshu Jain said in a statement.
Deutsche Bank's quarterly report stated a third-quarter revenue of 7.74 billion euros, which was 10 percent less than in the July through September period of 2012. Weak income from the bank's debt trading operations, which was down by 48 percent, weighed on the result.
The biggest drain on Deutsche Bank's profits was legal charges to the tune of 1.2 billion euros. Deutsche Bank is currently being investigated over allegations that some of its employees have been involved in manipulating theLiborand Euribor benchmark interest rates. Moreover, the bank is likely to face billions in settlement costs over subprime mortgage dealsin the United States. In addition, it faces charges of tax evasion in connection with the EU's carbon emissions trade.
The 1.2 billion euros laid aside by Deutsche Bank in the third quarter bring the total of its litigation provisions to 4.1 billion euros. The bank's leadership duo said it expected challenging times ahead.
Nevertheless, Anshu Jain and Jürgen Fitschen also noted that Deutsche Bank was making progress in changing its corporate culture.
“We are advancing step by step on our path towards creating outstanding foundations for Deutsche Bank within the next three years,” they said.
uhe/slk (dpa, Reuters, AFP)