Thursday, March 21, 2013

Deustche Bank Legal Tab Mounts Up



Deustche Bank revised fourth-quarter earnings downward, setting aside about €600 million ($773 million) in legal provisions for U.S. mortgage litigation in another sign that mounting legal liabilities are cutting into investment -bank profits, WSJ reports.. The bank updated its fourth-quarter net loss to 2.54 billion euros, wider than the originally reported loss of €2.17 billion. According to a WSJ report this compared with a profit of €147 million a year earlier.

The bank also reiterated that it would make first-quarter targets for a key measure of the bank’s health known as the capital ratio, indicating a strong first quarter, analysts said. Deutsche Bank has now set aside €2.4 billion for litigation, with additional identified non-provisioned legal risks of €1.5 billion. The bank’s legal provisions were nearly 10 times net profit of €237 million for 2012, compared with a profit of €4.1 billion in 2011. Total legal risk is likely much higher than what the bank has publicly identified, analysts told WSJ.

No comments:

Post a Comment