Deutsche Bank posted a surprise pre-tax loss of €1.15bn for the fourth quarter
Deutsche Bank posted a surprise pre-tax loss of €1.15bn for the fourth quarterReuters

Deutsche Bank unveiled a plunge in profits after stumping up billions of euros in financial scandal fines and litigation fees.

The German lender posted a surprise pre-tax loss of €1.15bn (£948m, $1.6bn) for the fourth quarter after being hit by heavy litigation and restructuring fees as well as a number of fines stemming from lawsuits and other regulatory investigations.

"We expect 2014 to be a year of further challenges and disciplined implementation," said the group in a statement while also pledging to hit its 2015 targets.

The group was originally scheduled to report results on 29 January.

Deutsche Bank paid €528m in the fourth quarter for litigation costs. This brings its total bill for fines and settlements to €2.5bn.

Last month, eight banking giants were fined a combined total of €1.71bn by the European Commission for rigging the key benchmark interest rates Libor and Euribor.

Deutsche Bank, as well as Barclay, Société Générale, RBS, UBS, JPMorgan, Citigroup and RP Martin were part of two separate illegal cartels which conspired to manipulate Euribor and Libor to benefit their own positions in euro and Japanese yen-denominated interest rate derivatives markets.

"What is shocking about the Libor and Euribor scandals is not only the manipulation of benchmarks, which is being tackled by financial regulators worldwide, but also the collusion between banks who are supposed to be competing with each other," said Joaquín Almunia, vice-president in charge of competition policy.

"Today's decision sends a clear message that the commission is determined to fight and sanction these cartels in the financial sector.

The German lender bore €725m of the total fine.

Deutsche Bank was also slapped with a $1.9bn fine in the same month for by the US Federal Housing Finance Agency to settle claims that it defrauded two US government-controlled companies in the sale of mortgage-backed securities before the 2008 financial crisis.

Overall, its 2013 fourth quarter revenue therefore fell by 16% to €6.58bn, as corporate banking and securities division weakness also pushed profits lower.