September 25, 2013 3:06 pm

Deutsche Bank says debt revenues will fall ‘significantly’

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Deutsche Bank has warned that revenues in its fixed income business were likely to be down “significantly” in the third quarter of the year, while the bank will also set aside more money to deal with litigation issues.

Speaking at a banking conference in London, the bank’s co-chief executive, Anshu Jain, said that market activity had been substantially lower in recent months.

Last week, the FT reported that Deutsche was likely to add its name to the list of banks warning that the third quarter has been tough for fixed income trading, because of a variety of factors including a strong third quarter in 2012 and an unusually bad slowdown over the summer months.

“We currently anticipate debt sales and trading revenues in the third quarter to decline significantly from last year,” Mr Jain said at the Bank of America Merrill Lynch banking and insurance CEO conference.

Concerns that the US Federal Reserve will soon pull back on its quantitative easing measures were a core reason for the decline, Mr Jain said, with more difficult trading conditions in certain products adding to a slowdown in customer activity and market volatility.

Mr Jain added that Deutsche Bank expected to set aside even more money for litigation when it announces its third-quarter results at the end of October.

Deutsche Bank revised its 2012 profits downwards in March after setting aside an extra €600m for mortgage litigation in the US, bringing its total litigation pot to €2.4bn.

The bank has also set aside €500m towards anticipated fines in relation to global regulators’ investigations into the London interbank offered rate (Libor) rate-rigging scandal that has already seen banks including Barclays, UBS and Royal Bank of Scotland fork out hundreds of millions in fines.

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