• Germany's news in English

Deutsche Bank drops 2008 targets after posting Q1 loss

AFP · 29 Apr 2008, 08:45

Published: 29 Apr 2008 08:45 GMT+02:00

Facebook Twitter Google+ reddit

Financial director Anthony di Iorio told an analyst conference call the financial crisis had made it impossible to provide an accurate forecast for the full year.

"These are very uncertain times, the markets are unpredictable," he replied when pressed to confirm the bank's outlook for pretax profit of €8.4 billion ($13.1 million).

Di Iorio added that due to the current market turmoil, Deutsche Bank could not give a forecast for its full-year results.

The bank posted a first quarter net loss excluding minority holdings of €131 million ($205 million), compared with a profit of €2.12 billion in the same period a year earlier.

Its pretax result fell to a loss of €254 million from a profit of €3.16 billion.

Deutsche Bank took write-downs of €2.7 billion after initially appearing to have escaped the worst of a financial crisis that followed the collapse of the US market for high risk, or subprime, mortgages in mid-2007.

Chairman Josef Ackermann said in a statement as saying that "in the first quarter of this year, financial market conditions were the most difficult in recent memory.

"In the month of March, pressure on the banking sector was more intense than at any time since the current credit downturn began. Inevitably, this left its mark on Deutsche Bank's results."

The bank said it had managed to offset the losses in part with €854 million in gains from the sale of shares in the German auto manufacturer Daimler, insurer

Allianz and industrial gas group Linde.

Without these gains, the net loss would have climbed to €1.1 billion.

Deutsche Bank had already warned it would be hard to hit its 2008 profit target owing to turmoil that has shaken the banking sector.

On April 1, Deutsche Bank said its lucrative investment banking unit had taken a serious hit from the US subprime turbulence, which has threatened several German banks with bankruptcy.

First-quarter results were undercut by €1.77 billion in mark-downs on leveraged loans and loan commitments, plus €885 million for commercial real estate loans and residential mortgage-backed securities.

In all, the charges came to €2.7 billion, higher than the April 1 forecast of about €2.5 billion.

Di Iorio also said the bank had sold around €1 billion worth of loans provided to finance leveraged buy-outs since the end of the first quarter.

International media had reported recently that Deutsche Bank was preparing to sell up to $20 billion worth of such loans.

Story continues below…

Meanwhile, Ackermann stressed that the bank was "well positioned to emerge stronger than ever from the crisis.

"We are equally determined to meet near-term challenges and to take advantage of longer-term opportunities," he added.

A breakdown of the results showed that the Corporate and Investment Bank unit, normally a strong contributor, saw revenues plunge 77 percent to €1.5 billion.

Earnings from retail banking operations were stable at €2.5 billion.

Shares in the bank shed 0.47 percent to €76.41 in midday Frankfurt trade while the Dax index of leading shares was down 0.57 percent overall.

Analysts said the results were better than the market had expected, but a local trader nonetheless commented that they still looked "pretty bad" and predicted they would put pressure on the bank's shares all day.

Facebook Twitter Google+ reddit

Today's headlines
These are Germany's top ten universities
The new library of Freiburg University. Photo: Jörgens.mi / Wikimedia Commons

These are the best universities in all of Germany - at least according to one ranking.

Introducing Swabians - 'the Scots of Germany'
Photo: DPA

These Southern Germans have quite a reputation in the rest of the country.

Woman sues dentist over job rejection for headscarf
Photo: DPA

A dentist in Stuttgart is being taken to court by a woman whom he rejected for a job as his assistant on the basis that she wears a Muslim headscarf.

Isis suspect charged with scouting Berlin attack sites
Photo: DPA

German federal prosecutors said Thursday they had brought charges against a 19-year-old Syrian man accused of having scouted targets in Berlin for a potential attack by the Isis terror group.

Berlin Holocaust memorial could not be built now: creator
The Memorial to the Murdered Jews of Europe, in Berlin. Photo: DPA.

The architect of the Berlin Holocaust memorial has said that, if he tried to build the monument again today, it would not be possible due to rising xenophobia and anti-Semitism in Germany and the United States.

'Liberal' Germany stopping Europe's 'slide into barbarism'
Ian Kershaw. Photo: DPA

Europe is not slipping into the same dark tunnel of hate and nationalism that it did in the 1930s - mainly thanks to Germany - one of the continent's leading historians has said.

Eurowings strike to hit 40,000 passengers
Travelers impacted by the strike on Thursday wait at Cologne Bonn airport. Photo: DPA.

The day-long strike by a Eurowings cabin crew union is expected to impact some 40,000 passengers on Thursday as hundreds of flights have been cancelled.

Deutsche Bank reports surprise quarter billion profit
Photo: DPA

Troubled German lender Deutsche Bank reported Thursday a surprise €256-million profit in the third quarter, compared with a loss of more than six billion in the same period last year.

US 'warned Merkel' against Chinese takeover of tech firm
Aixtron HQ. Photo: DPA

The German government withdrew its approval for a Chinese firm to purchase Aixtron, which makes semiconductor equipment, after the US secret services raised security concerns, a German media report said Wednesday.

Long-vanished German car brand joins electric race
Photo: DPA

Cars bearing the stamp of once-defunct manufacturer Borgward will once again roll off an assembly line in north Germany from 2018, the firm said Wednesday.

10 German clichés that foreigners get very wrong
Sponsored Article
Last chance to vote absentee in the US elections
10 ways German completely messes up your English
Germany's 10 most weird and wonderful landmarks
10 things you never knew about socialist East Germany
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
jobs available
Toytown Germany
Germany's English-speaking crowd