Deutsche Bank AG’s net profit fell 64% in the Q2 as financial market turbulence from the US credit crisis led to €2.3 billion in writedowns, the bank said Thursday.
Deutsche Bank, Germany’s biggest, said net profit in the April through June period fell to €645 million (S$1 billion) from €1.8 billion in the Q2 of 2007.
Total net revenues were down 39% to €5.4 billion (S$8.42 billion) from euro8.8 billion a year ago, the Frankfurt-based bank said. “The second quarter of 2008 proved to be another very challenging quarter for the banking industry,” said Josef Ackermann, Deutsche Bank’s chief executive in a statement. Corporate banking and securities’ loss before income taxes for the quarter were €311 million ($485.2 million), the bank said.
Markdowns on residential mortgage-backed securities, bond insurers, commercial real estate, and other positions amounted to €2.3 billion ($3.6 billion). “The environment continued to affect the performance of our investment banking business, but our ‘stable’ businesses again proved their resilience. Despite additional markdowns, we produced a solid profit,” Ackermann said.
“Looking forward, we remain cautious for the remainder of 2008. We will continue to strictly manage cost, risk and capital and to reduce our exposures in key areas. We will continue to invest in all our core businesses, both organically and by acquisition, but we will not relax our discipline.” Ackermann was not more specific on investing in acquisitions, nor did the report offer more of an outlook for the year. (Economic Times)