Deutsche Bank profit hit by legal costs

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Deutsche Bank has reported a sharp fall in profits after setting aside €1.5bn ($1.6bn; £1.1bn) to cover legal costs and regulatory fines.

Net income for the first three months of the year was €559m, down by a half on a year earlier. Revenue rose by almost a quarter to €10.4bn.

The bank had already disclosed it had set aside the €1.5bn.

The results come just days after the bank was fined €2.3bn for trying to manipulate inter-bank lending rates.

The sharp jump in revenue to "near record levels" reflected a "strong performance across businesses and a favourable impact of foreign exchange movements", the bank said in a statement.

Revenue at the bank's asset management division was up 30% at €1.4bn, while revenue at the corporate banking arm rose 15% to €4.7bn.

The $2.5bn fine by US and UK regulators related to Deutsche's attempts to manipulate the Libor and Euribor rates. At the end of March, the bank had €4.8bn set aside in "litigation reserves".

It is a record penalty for such misconduct because Deutsche tried to mislead regulators. The bank said it "deeply regretted" the matter.

Deutsche said it had "disciplined or dismissed individuals" involved and tightened governance controls. However, US regulators are demanding the dismissal of more senior management.

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