Deutsche Bank Announces €94m Loss Due to Legal Costs

Shares in Deutsche Bank traded lower in Frankfurt after the lender reported an unexpected net loss for the third quarter, ending September, after spending €894m ($1.13bn, £705.82m) to settle investigations during the quarter.

Deutsche's stock had dropped 1.81% at 9.25am (GMT/CET) on 29 October, after the firm reported a net loss of €94m for the three months to September, against a net income of €41m a year ago, due to the legal costs.

The group said in a statement that its important investment banking division logged a 9% rise in revenue as debt trading surged 15%, a modest increase when compared with its US-based rivals. Morgan Stanley reported an 87% jump in earnings owing to increased trading.

Deutsche Bank also issued a note of caution on some of its revised 2015 profit goals, saying conditions remained challenging in several areas including transaction banking.

But it said it was "broadly on track" to deliver on its promise of a 13% to 15% profit gain in its investment banking division.

Deutsche Bank also announced that chief financial officer Stefan Krause will be replaced by Marcus Schenck, a top banker at rival Goldman Sachs, next year.

Krause will remain on Deutsche's board, but will move to head strategy and oversee the bank's cost-cutting programme.

Co-chief executives Jürgen Fitschen and Anshu Jain said in the statement: "Net income in this quarter was materially impacted by provisions, as we continued to work toward resolution of litigation matters related to legacy issues. We also incurred costs of adapting to new regulation, elevating our systems and control frameworks to best in class, and investing in growth in our core businesses. These costs were partly offset by further savings in our Operational Excellence (OpEx) program which has already reached its original year end 2014 target.

"Looking ahead, near-term headwinds persist. Europe's macro-economic outlook faces challenges, and geopolitical risks continue to create uncertainties. In the coming quarters, we will continue to work systematically through our strategic agenda: resolving outstanding litigation matters, completing the task of adapting our platform to new regulation, finalising our investments in OpEx, and reaping the benefits of investments in core business growth.

"We remain resolutely focused on executing this agenda. Robust underlying performance in our core businesses indicates the progress we are making on that journey," they added.

Deutsche Bank has spent about €7bn on fines and settlements since 2012.