Deutsche Bank may have its credit rating cut by Standard & Poor’s after the lender reduced its reported profit for 2012 amid rising legal costs.
Deutsche Bank said last week it had set aside additional money to cover costs linked to U.S. mortgage lawsuits and other regulatory probes, lowering 2012 profit by about $514m.
'Ongoing economic, regulatory, and legal risks will continue to hurt the bank’s performance', S&P said in the statement.
The bank’s ability to generate capital amid Europe’s economic turmoil, including 'recent tensions in Cyprus, faces 'substantial risks', S&P said. 'Deutsche Bank’s capitalization is still below peers’ in our view, despite a significant improvement on the second half of 2012'.
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