Deutsche Bank restates 2012 profit on writedowns, legal costs

Deutsche Bank, Germany’s biggest bank, said on Wednesday that writedowns and legal costs hit its 2012 earnings harder than expected and it has now been forced to restate last year’s profits.

“New developments related to specific existing legal matters have occurred after the disclosure of (our) preliminary, unaudited 2012 results on January 31,” Deutsche Bank said in a statement.

“Based on these developments ... the bank has increased its provisions for litigation by €600 million ($774 million) to €2.4 billion.

“This reduces the previously announced income before income taxes by €600 million... and net income by €400 million,” it said.

Deutsche Bank is currently being investigated over allegations that some of its employees may have been involved in rigging the Libor and Euribor interest rates.

And one of its co-chief executives, Juergen Fitschen, is among a number of top managers suspected of involvement in a tax evasion scheme in the trading of carbon emissions certificates.

Deutsche Bank’s restated year-end net profit now stood at €291 million in 2012, compared with €4.326 billion in 2011.

Pre-tax profit plummeted to €784 million from €5.39 billion.

Deutsche Bank’s so-called Core Tier One capital ratio—a measure of a bank’s ability to withstand unforeseen risks—slipped to 7.8 per cent in 2012 from 8.0 per cent announced at the end of January.

“Nevertheless, the bank reaffirms its target for (a capital ratio) of 8.5 per cent at March 31,” it insisted.

Plans to pay shareholders an unchanged dividend of 0.75 euros per share would not be affected, the statement added.

Deutsche Bank shares were the biggest gainers on the Frankfurt stock exchange on Wednesday, adding 2.42 per cent while the blue-chip DAX 30 index was up 0.56 per cent.


Source: thehindubusinessline