Deutsche Bank hiked its litigation reserves by $1.3bn in the third quarter mainly to cover alleged violations at the lender's Russian unit. 

The lender said on October 29 it had discovered abuses of internal policies during its investigation into so-called ''mirror-trading'', which may have enabled Deutsche Bank's clients to shift money offshore without alert the relevant authorities.

"We can't say much because we don't know much and that's shame on us,'' co-CEO John Cyran said at an investor conference in London. "It looks as though the bank was used."

Tim Wiswell, head of Russian equities at Deutsche Bank, lost his job earlier this year after 12 years at the lender amid an investigation by US and European regulators into transactions worth over $6bn over four years. Wiswell said on October 7 that he is suing his former employer for wrongful dismissal.

Germany's biggest bank has already forked out about $12bn on litigation costs like fines and settlements since 2012 for scandals that included the rigging of interest rates in the UK.  If the bank is found guilty of wrongdoing, industry sources have indicated the fine could be as much as  a $1bn.  

The scandal is the biggest involving a foreign bank in Russia since Bank of New York agreed to settle a $22.5bn lawsuit in 2009 relating to a 1990s money laundering scandal.  Lawyers for the Russian government had sought $1bn but the case was settled with the bank paying Russia's legal fees of $14mn as well as providing a loan on favourable terms of $400mn to Russian banks. 

Deutsche Bank shut down its investment bank operations in Moscow and axed at least 200 employees following the allegations of money laundering.