Deutsche Bank to pay $2.14b in Libor case

DEUTSCHE Bank AG is poised to settle United States of America and United Kingdom’s investigations into rigging of benchmark interest rates for about 2 billion euros ($2.14 billion), according to a person briefed on the matter.

New York’s Department of Financial Services also may install a monitor at the bank to oversee its compliance with the settlements to be announced as soon as today according to the person, who asked not to be identified because the talks were private.

The Frankfurt-based firm said Wednesday it will log 1.5 billion euros in litigation costs in the first quarter.

While the fine may be the largest yet for alleged interest-rate rigging, the bank said it still expects to report a profit for the first quarter and near-record revenue.

A settlement would remove a legal threat that has loomed over Anshu Jain’s three-year tenure as co-chief executive officer.

“It looks like Deutsche Bank must have had an excellent quarter in terms of underlying earnings,” said Dirk Becker, a Frankfurt-based analyst at Kepler Cheuvreux who recommends investors buy the lender’s shares. “Litigation charges are not a surprise: The question is how much more litigation costs will be coming.”

Deutsche Bank rose 0.4 per cent to 31.55 euros at 11:00 a.m. in Frankfurt trading, valuing the company at 43.5 billion euros.

The shares have gained 26 per cent this year, outpacing the 14 per cent advance of the 45-company Bloomberg Europe Banks & Financial Services Index.

“We continue to work with the authorities that are reviewing interbank offered rates matters,” said Renee Calabro, a Deutsche Bank spokeswoman in New York. The company is scheduled to release earnings on April 29.

The penalty would top UBS Group AG’s $1.5 billion settlement to rank as the largest levied in the long-running, industrywide investigation into rigging of interest-rate benchmarks including the London interbank offered rate.

About a dozen firms already have paid a combined $6.5 billion since the first deal with Barclays Plc in June 2012.