Deutsche Bank Q2 profit falls amid market turmoil
AFP · 31 Jul 2008, 10:51
Published: 31 Jul 2008 10:51 GMT+02:00
In a statement, Germany's biggest bank said net profit had fallen by 63 percent to €649 million ($1.01 billion), well above an analysts' forecast compiled by Dow Jones Newswires of €426 million. The bank's pre-tax profit plunged by 76 percent to €642 million.
Deutsche Bank benefited from favourable tax measures and from partial sales of shareholdings in the Allianz insurance group and automaker Daimler, with the latter contributing €145 million to the pre-tax figure. The bank also divested a holding it owned in the telecommunications group Arcor for a pre-tax gain of €96 million.
Deutsche Bank had said in early July that it expected to make a profit in the second quarter and that it would not require any cash injections. But the bank has nonetheless suffered from the global credit crisis that broke a year ago, and was obliged to write down the value of its assets by €2.3 billion in the second quarter, following a markdown of €2.7 billion in the first three months of the year.
Revenue posted by the CIB investment banking division was therefore cut by more than half to €2.9 billion. The financial crisis has also cut into earnings from transactions carried out by the bank for its customers. But earnings from the private banking unit PCAM showed a much more modest drop of eight percent to €962 million.
"Looking forward, we remain cautious for the remainder of 2008," bank chairman Josef Ackermann said in a statement.
The bank declined several months ago to give a detailed outlook for 2008 owing to ongoing financial market turmoil. It had previously set a pre-tax target of €8.4 billion.