Deutsche Bank Q2 litigation costs more than double in 2015

Deutsche Bank’s litigation costs rocketed to €1.2bn (£846m) in the second quarter of 2015, more than double the figure for the same period last year, its financial results reveal.

Its litigation costs increased by €730m (£514m) compared to its litigation spend of €470m (£331m) in the second quarter of 2014.

Deutsche Bank’s revenue for the second quarter of 2015 was €9.2bn (£6.5bn), up from €7.9bn (£5.6bn) in the second quarter of 2014.

The bank’s litigation provisions also increased to €3.76bn (£2.65m) on 30 June 2015, up from €3.21bn (£2.27m) on January 1 2015.

The bank is currently involved in a host of ongoing investigations and litigation.

These include a European Commission credit default swap antitrust investigation and an associated US class action; regulatory investigations into foreign exchange trading, high frequency trading and interbank offer rates and a US class action alleging breaches of fiduciary duty.

The bank paid out $2.5bn (£1.5bn) in fines to US and UK regulators in April for its role in the Libor manipulation scandal. The regulators found that its employees had manipulated the Libor base exchange rate and other exchange rates. The fine was the largest handed out to any bank involved in the Libor scandal.

Slaughter and May, Paul Weiss Rifkind Wharton & Garrison and Hengeler Mueller acted for the bank during the course of the investigation.

Last week Legal Week reported that Deutsche Bank had completed a legal panel review process, appointing firms such as Allen & Overy, Ashurst, Hogan Lovells, Mayer Brown and Latham & Watkins.

Panel firms account for 85-90% of Deutsche’s legal spend.

Meanwhile, Lloyds Bank reported that it had made provisions for regulatory matters and other legal disputes totalling £1.8bn in the first half of 2015, up from £1.1bn in the first half of last year.

The biggest single portion of this was a provision of £1.4bn to deal with the payment protection insurance mis-selling scandal by £1.4bn.

The bank also faces a number of other legal and regulatory issues, including ongoing investigations and litigation related to the fixing of Libor and forex rates and a shareholder action connected to its takeover of HBOS in 2009.

Herbert Smith Freehills is acting for the bank in the latter dispute.