Deutsche Bank Legal on Potential Report of Legal Costs
Deutsche Bank AG (DBK) fell in Frankfurt trading on a report that the company may have to boost provisions for legal costs by 30 percent.
The shares declined as much as 1.4 percent to the lowest in more than seven weeks and were 1.2 percent lower at 25.03 euros as of 9:07 a.m. in Frankfurt. The benchmark STOXX 600 Banks Index lost 0.7 percent. Today’s decline extended Deutsche Bank’s slump to 24 percent this year.
The German news magazine Spiegel cited unidentified people close to Deutsche Bank as saying legal provisions could reach 7 billion euros ($8.8 billion).
“Deutsche Bank has suggested that legal costs will rise and the market was expecting this kind of number,” Ingo Frommen, an analyst at Landesbank Baden-Wuerttemberg who recommends investors buy the shares, said by phone from Stuttgart. “They’re probably going to try to pack as many costs as possible into their third-quarter numbers because they did rather well from an operating perspective.”
The bank is scheduled to publish third-quarter earnings on Oct. 29.
The company’s legal costs, which totaled 3 billion euros last year, are hampering efforts to build capital and increase returns for investors. Deutsche Bank has yet to resolve probes into its role in industrywide attempts to manipulate benchmark interest rates and currency markets and faces lawsuits alleging it didn’t make adequate disclosure of U.S. mortgage-backed securities.
Source: bloomberg- Deutsche Bank Legal on Potential Report of Legal Costs
