Europe's Biggest Banks Putting Aside $23.7 Billion To Deal With Future Legal Issues

Europe’s biggest banks have set aside $23.7 billion in the past year to deal with litigation and regulatory expenses associated with the financial crisis and potential claims from consumer watchdogs.

Second-quarter results from UBS AG (NYSE:UBS), Credit Suisse Group AG (NYSE:CS), Deutsche Bank AG (NYSE:DB), Societe Generale SA (PA:SOGN), Barclays PLC (NYSE:BCS) and BNP Paribas SA (EN:BNP) show a marked increase in provisions related to regulatory expenses and future litigation issues.

Most banks said in their Q2 results that the extra provisions were set aside to deal with ongoing legal and regulatory matters ranging from allegations of market manipulation to anti-trust investigations into credit default swaps.

While many of the banks report their litigation provisions differently, most reported large increases.

The highest increase was reported from French bank BNP Paribas, at 11.5 billion euros ($15.27 billion), which had been set aside to cover additional costs such as restructuring, litigation, fines and tax-risk provisions.

British bank Barclays had set aside 3.2 billion pounds ($4.9 billion) to deal with the ongoing problem of payment protection insurance that was mis-sold by many of the UK’s biggest banks, resulting in record payouts to consumers.