New legal costs cut Deutsche Bank profits Deutsche Bank: the biggest operator in the market for "leveraged super senior" trades in the run-up to the financial crisis Deutsche Bank has revealed €600m of extra legal provisions that have cut last year's profits and hit its capital. Germany's flagship lender, burdened by a string of legal and regulatory challenges, is having to set aside more money to cover potential costs from mortgage-related litigation in the US, it said on Wednesday. The extra €600m of provisions - lifting the total set aside for litigation to €2.4bn - also covered "unrelated regulatory investigations," the bank said. "New developments related to specific existing legal matters have occurred after the disclosure of the bank's preliminary, unaudited 2012 results," it added. As a result, Deutsche's pre-tax profits for 2012 would be cut by about €600m to €784m, the bank said. Net income - announced in January as €665m - fell instead to €291m. Deutsche's closely watched capital strength is also affected. The bank said its core tier one capital ratio assuming the full implementation of Basel III banking rules - the measure that most concerns investors - was 7.8 per cent at the end of the year, not 8 per cent as stated. The bank still said it would meet its target of lifting the ratio to 8.5 per cent by the end of this month. Analysts at Daiwa Capital Markets said: "With the bank seemingly still staunchly opposed to raising new capital, it will almost certainly be down to more aggressive management of risk-weighted assets to recover the lost ground." Deutsche said accounting rules meant anything that affected its legal provisions before its financial statements were finalised had to be made known. It also said its proposed dividend for 2012 would remain at 75 cents, as in 2011. In early Frankfurt trading, Deutsche shares were up 2.2 per cent at €32.72.