Deutsche Bank AG (DBK)’s provisions for potential legal costs could rise to as much as 7 billion euros ($8.8 billion), Spiegel reported, citing people close to Germany’s largest bank that it didn’t identify.
That would be 30 percent more than what Deutsche Bank has accounted for so far. The Frankfurt-based lender said on July 29 second-quarter reserves for litigation expenses increased 450 million euros from the first quarter to 2.2 billion euros, while contingent liabilities rose to 3.2 billion euros to reflect potential costs from regulatory investigations. It said it couldn’t predict such costs for the rest of the year.
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.