GERMANY'S biggest bank, Deutsche Bank, was yesterday counting the cost of the Peter Young scandal at its fund management arm as it revealed modest profits despite a sharp rise in new business.

Profits after tax and special items inched up by 5 per cent to DM2.2 billion (£826.3 million) for 1996, even though operating profits leapt by 38 per cent, much higher than expected by analysts. Mr Young was dismissed by Morgan Grenfell in September after the discovery of "irregularities" in three investment funds under his control.