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Deutsche Bank's legal woes threaten recovery

Thursday, July 30, 2015 - 01:39

The new boss of Germany's Deutsche Bank has hit out at staff in a memo after Germany's largest bank warned that its turnaround was at risk from heavy legal charges. Ciara Lee reports on the results and how they compare to others banking players in Europe.

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A flurry of results reveal a mixed picture for Europe's banking sector. In Germany, good results at Deutsche Bank were overshadowed by legal costs. It's set aside 1.2 billion euros for fines and settlements - the same amount it made in second quarter profit, which were below expectations. As a result it says its performance targets are at risk. That gives new boss John Cryan - in the job for only four weeks - a big challenge. He's warned staff in a memo that their performance was "nowhere near good enough". Research Director at City Index, Kathleen Brooks, says he's clearly out to make his mark. (SOUNDBITE) (English) KATHLEEN BROOKS, RESEARCH DIRECTOR AT CITY INDEX, SAYING: "John Cryan sounded very clear that he is going to cut any businesses from any countries that aren't performing, that aren't making money. And to me that is a much more aggressive strategy. It suggests to me that he is going to be much more of a risk taker and if they don't perform then they are out." In Spain the euro zone's biggest bank by market value was showing its mettle. Santander reported an 18 percent rise in second quarter net profit, boosted by rising revenues in Britain and the US. Its plan to ramp up profits to expand lending appears to be working thanks to a recovering European economy. But it's not relying on its home market. Despite growth there revenues in Spain shrank nearly one percent In Britain state-backed Royal Bank of Scotland also reported a rise in Q2 profits. That's despite a restructuring bill of over a billion pounds. RBS also has legal costs - it's set aside 459 million pounds to deal with them.

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Deutsche Bank's legal woes threaten recovery

Thursday, July 30, 2015 - 01:39