Deutsche Bank Q1 profits fall 50% over litigation costs

26th April 2015, Comments 0 comments

Deutsche Bank said Sunday its profits fell around 50 percent year on year in the first quarter over legal costs from a rate-rigging case brought by US and British authorities.

Net profits came to 559 million euros ($608 million) for the period running from January to March, down from 1.1 billion euros in the same period of 2014.

Germany's biggest lender had warned Wednesday that its litigation costs for the period amounted to 1.5 billion euros but that it would still post a profit.

Its net profit came in higher than the 256-million-euro average estimate of analysts surveyed by Bloomberg News.

On Thursday, US and British authorities announced Deutsche Bank would have to pay a record $2.5 billion for manipulating interest rates in a multi-bank conspiracy that undermined global financial markets.

Deutsche Bank agreed to pay the fine for manipulating the London InterBank Offered Rate or Libor, used to peg millions of interest rate-sensitive contracts and loans around the world.

Ahead of a news conference on Monday to detail a strategic overhaul, Deutsche Bank announced a 24-percent leap in net revenues to 10.4 billion euros, which it attributed to "a strong performance across businesses and a favourable impact of foreign exchange movements".

The earnings report came several days ahead of schedule and after Deutsche Bank said Friday it was seeking to sell its Postbank subsidiary as part of a shift away from high-street retail banking.

Deutsche Bank is seeking to confront the challenges of increased financial sector regulation and the low interest rate environment with an operations overhaul.

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© 2015 AFP

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