The spreading scandal over the manipulation of key lending rates and the downturn of Europe’s economy took their toll on two of the region’s leading investment banks, Deutsche Bank and UBS, which both revealed increased provisions and sharp profit falls.
Both banks are caught up in the scandal around the alleged manipulation of the London Interbank Offered Rate and related benchmark lending rates and yesterday topped up their estimates for litigation risk by a combined €580m. This reflects in part the expected costs of settling regulatory probes around the world.
Barclays last month paid ￡290m to settle its case with regulators in the UK and US over the Libor affair in a move that led within days to the resignation of the bank’s top three directors, including Bob Diamond, chief executive.