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Deutsche's litigation troubles

October 29, 2014

Germany's largest lender, Deutsche Bank, has reported a third quarter loss as provisions for legal liabilities eat into earnings. But its investment arm excelled once more between July and September.

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Deutsche Bank logo
Image: Reuters

Deutsche Bank announced Wednesday it logged a loss of 92 million euros ($117 million) in the third quarter, the third consecutive quarterly loss since Co-CEOs Jürgen Fitschen and Anshu Jain took over two and a half years ago.

In the same quarter a year earlier, Deutsche still posted 51 million euros in earnings and probably believed the worst in terms of restructuring and legal issues was over.

But legal costs in the third quarter alone totaled 894 million euros, the lender acknowledged in a statement.

Heavy burden

The bank had reported earlier that it had raised its reserves to cover legal liabilities from 2.2 billion euros in the second quarter to 3 billion euros for the following three months.

The list of legal action against Deutsche is long, it includes lawsuits over its involvement in the US mortgage bond market, allegations about its role in the Libor benchmark rate rigging scandal and claims about manipulation of the gold and silver markets.

The lender announced Wednesday that Marcus Schenk - a former chief finance expert with German utility E.On and coming from Goldman Sachs - would take over as Deutsche's Chief Finance Officer, replacing Stefan Krause who'd now be responsible for strategic and organizational affairs.

hg/ng (dpa, Reuters)