Total could be over €2 bln

Deutsche Bank Takes a €1.5bn Charge for LIBOR Litigation

After several years of waiting Deutsche Bank is about to be presented with the final bill for LIBOR manipulation charges

Deutsche Bank, the biggest German Lender announced late yesterday that it will incur a litigation charge of “approximately €1.5bn”. The announcement is directly related to the latest round of settlements on the count of manipulating the London Interbank Offered Rate (LIBOR).

The uncertainty of the LIBOR related expenses has been a shadow hanging above Deutsche Bank’s balance sheet over the past couple of years. According to information available to date, the company appears to be the hardest hit when it comes to LIBOR expenses. The previous “record holder” was Swiss bank UBS, which incurred close to $1.5 billion.

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According to sources cited by the Financial Times, the total fine size could exceed €2 billion.
The costs associated with LIBOR litigation for Deutsche are exacerbated by the involvement of New York’s Department of Financial Services. The regulator has not been involved in similar charges against other banks.

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According to the same sources, the settlement which Deutsche Bank is expected to sign is expected to include the U.S. Department of Justice, the Commodity Futures Trading Commission and the UK’s Financial Conduct Authority.

The company has already paid €725m to the European Commission for settling allegations for manipulating yen Libor and Euribor rates.

The bank said that litigation charges are not going to hamper its profitability for the quarter, as trading conditions are set to lead to increased revenues. The company is set to report earnings figures next week on the 29th of April. Deutsche Bank’s shares closed at €31.44 in Frankfurt trading yesterday, before the announcement was made public.

The settlement charges should be widely priced into the current market price as has been expected by investors. With the uncertainty out of the way, investing focus will be largely on the quarterly earnings figures and the outlook provided by Deutsche bank.

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