Deutsche Bank is yet again making headlines, with Hamburg-based bank M.M. Warburg & Co announcing this Thursday that it has filed a lawsuit against Deutsche. The firm is seeking €46 million ($53.04 million) which the bank was ordered to pay in capital gains tax.
The lawsuit, which was filed in December last year in a Frankfurt regional court, accuses Deutsche Bank of failing to withhold taxes of €46 million for a series of share trades. These allegedly took place in 2010 and 2011 as part of Deutsche’s role as a custodian bank.
Tax authorities in Hamburg then came looking to Warburg to repay those funds, which prompted the legal action, the bank said, denying any wrongdoing. However, a Deutsche Bank spokesman has responded to Warburg’s allegations, saying they were “without merit” and that the bank “strongly rejected” the accusations.
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The lawsuit is the latest of a long list of issues for Deutsche Bank. In recent months the German firm has experienced raids at its headquarters, a global market selloff and earlier this week it was revealed that it failed to sell $1.2 billion worth of riskier loans to investors last year.
Commenting on the issue, Deutsche Bank spokesman Tim Oliver Ambrosius told Bloomberg: “The allegations Warburg now distributed to media against Deutsche Bank as the custodian bank for the seller are known to us. We see no basis for them. So far, we haven’t received the complaint.”
The market expects a tough Q4 for Deutsche Bank
Whilst this setback is small compared to the larger issues Deutsche has faced over the past years, the constant stream of bad news is hurting confidence in Christian Sewing, the bank’s Chief Executive Officer, to turn the bank around.
On top of all this, fourth-quarter results are also expected to be disappointing for Deutsche Bank. According to a report written by Mainfirst, the bank struggled during the fourth quarter, particularly in debt capital markets and fixed income and sales trading. UBS Group AG also expects Deutsche to report a loss in Q4, 2018.