Deutsche Bank Profit Halves on Litigation Costs

By Eyk Henning 

FRANKFURT-- Deutsche Bank AG said Sunday its first-quarter net profit fell to EUR559 million ($607.8 million) from EUR1.1 billion a year earlier as hefty litigation costs outweighed near record revenue.

The German lender's revenue rose 24% to EUR10.4 billion on strong performances from its investment-banking and asset- and wealth-management operations. Analysts on average expected net profit of around EUR770 million and revenue of about EUR8.9 billion.

The consensus estimates were compiled before a Deutsche Bank statement on Wednesday said the lender would set aside EUR1.5 billion in additional litigation reserves in the first quarter. A bulk of that sum was to cover a $2.5 billion charge for a settlement with U.S. and U.K. regulators disclosed Thursday resolving allegations that Deutsche Bank rigged an interbank interest rate benchmark, known as Libor.

The bank late Friday gave a preview of its long-awaited new strategy, confirming earlier reports that it would dispose of its retail unit Postbank by floating a majority stake on the stock market or selling it to a rival. Co-chief executives Anshu Jain and Jürgen Fitschen, as well as strategy chief Stefan Krause, will present details of Deutsche Bank's overhaul Monday morning.

Write to Eyk Henning at [e-mail]

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