Deutsche Bank sees drop in profit, not confidence

Germany's top lender Deutsche Bank announced Tuesday a 37-percent drop in third quarter profits due to the financial downturn but said it was confident it could face the economic crisis without public capital.

Deutsche Bank sees drop in profit, not confidence
Photo: DPA

The eurozone debt crisis, market turmoil and fears of a global slowdown combined to create the worst financial climate since the collapse of Lehman Brothers in 2008, bank chief Josef Ackermann said in a statement.

“The operational sphere in the third quarter has not been as difficult since the end of 2008,” he said in a written statement.

The Frankfurt-based bank said third-quarter profit had been hit by activities at the group’s investment bank.

At €777 million ($1.08 billion), the result was 64 percent lower than in the first quarter and 37 percent lower than in the second quarter, highlighting the deteriorating situation, the bank said.

A year-on-year comparison made little sense, according to the bank, since the third quarter of 2010 had seen an exceptional charge from the purchase of Postbank, which had resulted in a €1.2-billion net loss.

Between July and September, a weak performance by the group’s investment bank was partially compensated by higher results in its private banking division, asset management and retail banking, for which the integration of Postbank helped.

The third-quarter net result was more than twice as high as forecasts by analysts surveyed by Dow Jones Newswires, who had predicted €328 million.

In morning trade after the announcement, shares in Deutsche Bank were 0.21 percent higher at €28.53, while the Frankfurt Dax was down by 0.28 percent.

Deutsche Bank has already said it has seen a €228 million depreciation in its portfolio of Greek bonds, which now stands at €900 million.

This represents a 46 percent drop on their nominal value, Finance Director Stefan Krause told an analysts’ conference call.

The bank said in recent months it had strongly reduced its exposure to the sovereign debt of struggling eurozone countries.

Its commitment to bonds from Portugal, Italy, Ireland, Greece and Spain has been reduced from €12.1 billion at the end of December to €4.4 billion at the end of September this year.

Amid the ongoing debate on the recapitalisation of European banks, Deutsche Bank said it was confident it would both face the eurozone debt crisis and fulfil stricter demands of European regulators.

If regulators impose on banks a nine percent ratio of assets to core capital, which Krause said was “the most probable figure according to what we hear,” Deutsche Bank said it would be able to reach this “without taking extra measures.”

“We are confident in the fact that Deutsche Bank will not need public money,” Krause said.


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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.