Deutsche Bank posts surprise profit in fourth quarter

Helped by unexpected drop in litigation costs

Deutsche Bank posted a surprise pre-tax profit of 253 million euros ($285 million) in the last quarter of 2014, helped by an unexpected drop in litigation costs and an upswing in trading revenues at its investment bank.

Germany's largest lender was able to postpone major litigation expenses in the fourth quarter because a number of major cases have yet to be settled.

But the bank warned in a presentation that there was still "significant uncertainty as to the timing and size of potential impacts" from legal costs.

Deutsche had originally hoped to clear the decks of legal issues in 2014 but has guided that 2015 will likely be the year instead when the majority of investigations are concluded. It is being probed across a range of divisions including possible attempts at interest-rate and forex-benchmark manipulation and possible violations of US sanctions on Iran.

Bucking the declines suffered by Wall Street rivals, Deutsche Bank reported a 20% increase in sales and trading as higher volatility at the start of the fourth quarter drove sales of shares and bonds.

The group's single biggest profit motor, its debt-trading operations, saw net revenue rise 13% to 1.1 billion euros in the quarter.

Pretax profit for the full year more than doubled to 3.1 billion euros.

But the group remains far from its own profitability goals, reporting a return on equity of onl 2.6% for the fourth quarter compared to its own target of around 12% by 2016.

($1 = 0.8873 euros)