Deutsche Bank suffers billion-dollar loss after scandal.
The bank reported a surprising pre-tax loss of €1,15 billion; Deutsche Bank was fined by the U.S. Federal Housing Finance Agency for allegations that it had defrauded companies in the sale of mortgage-backed securities before the 2008 financial crisis; the institution was also penalized by European Union antitrust regulators for manipulating interest rates.
FRANKFURT, Jan 20 (Reuters) Deutsche Bank reported a surprising pre-tax loss of €1,15 billion in the fourth quarter, due to heavy litigation and restructuring costs, and warned that 2014 would be a year of new challenges and reform.
The unexpected loss is likely to exacerbate the problems that have plagued the bank in the past year, especially an extensive list of lawsuits and regulatory issues, and to redouble the pressure on co-CEOs Anshu Jain and Juergen Fitschen to prove that their turnaround plan is on track.
The bank said litigation cost it 528 million euros in the quarter, bringing its year-to-date bill for fines and settlements to 2,5 billion euros and reducing its litigation reserves to 2,3 billion euros at year-end.
Deutsche Bank was fined $1,9 billion in December by the U.S. Federal Housing Finance Agency to settle allegations that it had defrauded two U.S. government-controlled companies in the sale of mortgage-backed securities before the 2008 financial crisis.
The bank was also fined 725 million euros by European Union antitrust regulators for manipulating interest rates.
The group's revenue fell 16 percent to 6,58 billion euros in the last quarter of 2013, partly due to weakness in its corporate banking and securities division, it said in a statement.
Deutsche Bank's pre-tax profit in 2013 rose to €2,07 billion, compared to €814 million in 2012. Net profit last year rose to €1,08 billion compared to €315 million in 2012.
(Reporting by Thomas Atkins)