Deutsche Bank Q2 profit falls amid market turmoil

Deutsche Bank posted on Thursday a second quarter net profit that was far lower than in the same period a year earlier, but still managed to exceed analysts expectations thanks to one-off items.

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.


Emergency numbers fail in several German states

Callers to the emergency numbers 110 and 112 weren’t able to reach operators Thursday morning in several German states.

The 112 emergency number on an ambulance.
The 112 emergency number on an ambulance. Photo: picture alliance/dpa | Boris Roessler

The emergency number 110 for police and 112 for fire crews failed around the country early Thursday morning, with callers unable to reach emergency operators for urgent assistance between about 4:30 am and 5:40 am local time.

The Office for Civil Protection and Disaster Aid is looking into these outages, which were reported in states including Lower Saxony, Baden-Württemberg, and  Brandenburg, and in major cities like Berlin, Cologne, Hamburg, and Frankfurt. Cologne was further affected by cuts to electricity, drinking water, and regular telephone services. Lower Saxony also saw disruptions to the internal phone networks of police and hospitals.

Emergency services are not reporting any more disturbances and people should be able to once again reach 110 and 112 around the country as normal.

Investigators are looking into the problem, but haven’t yet established a cause or any consequences that may have happened due to the outage. Provider Deutsche Telekom says they have ruled out the possibility of an attack by hackers.