Deutsche Bank AG declined as much as 3.9 per cent in trading here, after Standard & Poor's said it might lower the lender's credit rating, as legal and regulatory costs were a drag on earnings.
Germany's largest bank was 3.1 per cent lower at Euro 30.31 by 10.29 a.m. in Frankfurt, bringing the decline this year to eight per cent. That compares with a 10 per cent drop in the 28-company Euro Stoxx Banks Index.
Standard & Poor's placed Deutsche Bank's A+ long-term rating on CreditWatch negative, S&P said in a statement yesterday. Deutsche Bank said last week it had set aside additional money to cover costs linked to US mortgage lawsuits and other regulatory probes, lowering 2012 profit by about Euro 400 million ($514 million) to Euro 291 million.
"Ongoing economic, regulatory, and legal risks will continue to hurt the bank's performance," S&P said in the statement.
The world's biggest banks are facing regulatory probes and lawsuits linked to the manipulation of benchmark interest rates as well as the improper sale of products such as interest-rate derivatives. Frankfurt-based Deutsche Bank, led by co-Chief Executive Officers Anshu Jain and Juergen Fitschen, also said in October it's a defendant in "numerous" civil suits as an issuer or underwriter in residential mortgage-backed securities.
