Deutsche Bank books loss from Postbank buy

Germany's largest bank, Deutsche Bank, posted Wednesday a sharp third-quarter loss linked to its purchase of Postbank, although underlying results were not quite as bad.

Deutsche Bank books loss from Postbank buy
Photo: DPA

Deutsche Bank reported a net loss of €1.2 billion ($1.66 billion) that included a one-off charge stemming from its takeover of Postbank, a deal meant to broaden Deutsche Bank’s revenue base.

Analysts polled by Dow Jones Newswires had forecast a deeper net loss of €1.47 billion.

Deutsche Bank warned on 21 September that it would incur a charge of €2.3 billion as part of its re-evaluation of the holding in Postbank, which has Germany’s largest retail banking network.

The new calculation was required because Deutsche Bank has offered to buy all of the shares in Postbank as part of an increase in its stake from nearly 30 percent to more than 50 percent by the end of this year.

Excluding the Postbank charge, Deutsche Bank said it made a net profit of €1.1 billion in the three-month period, which was nonetheless down by about 21 percent from its profit of 1.4 billion in the third quarter of 2009.

The bank reported net revenues of €5.0 billion including the charge and a pre-tax operating loss of €1.0 billion.

Without the charge, Deutsche Bank posted a pre-tax operating profit of €1.3 billion, the same amount as in the third quarter of 2009.

A statement quoted chairman Josef Ackerman as saying that “the third quarter results again prove the robustness of our recalibrated business model despite the difficult ongoing macro-economic and market conditions.”

Deutsche Bank is buying Postbank to add a strong retail banking pole to its traditional investment bank activities.

Deutsche Bank raised €10.2 billion early this month, its biggest capital increase ever, to finance the Postbank takeover and reinforce its shareholder capital base in view of proposals from international banking regulators in response to the global financial crisis.

“Our retail banking operation is vastly increasing its footprint in Germany, which will balance our earnings towards an even more stable business,” Ackermann said.

The bank booked €362 million in loss provisions in the quarter, less than the €544 million recorded in the same period of 2009 but more than the €243 million seen in the second quarter of 2010.

It reported a Tier 1 capital ratio of 11.5 percent and a core Tier 1 ratio of 7.6 percent, both well within so-called Basel III guidelines being drafted to ensure banks are not vulnerable to another financial crisis.

Deutsche Bank did not provide an outlook for the full year, but has already targeted a pre-tax profit of €10 billion in 2011.


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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.