Deutsche Bank (DB) posted its first quarterly loss in five years after a $4.2 billion writedown of mortgage-backed securities and other bad debt. With a market capitalisation of more than $60 billion, Deutsche Bank is Germany’s largest bank, and prior to this most recent quarter, had escaped relatively unscathed from the mortgage mess. But last quarter’s writedown led to a narrow loss of 131 million euros, down from 2.12 billion euros last year. Bloomberg:
Earnings were lifted by almost 1 billion euros from selling stakes in companies and a tax gain. Deutsche Bank fell as much as 1.6 per cent in Frankfurt trading. “The figures look great if you take the Swiss rivals as the benchmark,” said Juergen Meyer, who helps manage 1.2 billion euros, including Deutsche Bank shares, at SEB Asset Management in Frankfurt. “If you take a closer look, the numbers really aren’t that good and were helped by share sales.”
Deutsche Bank fell 0.5 per cent to 76.28 euros as of 12 p.m. The German bank has declined 33 per cent in the past year, compared with a 30 per cent drop in the Bloomberg Europe Banks and Financial Services Index of 59 stocks…
…Deutsche Bank wrote down the value of leveraged loans and loan commitments by 1.8 billion euros and of securities backed by residential and commercial mortgages by 885 million euros in the first quarter. The writedowns are net figures after hedges and fees. The company had said April 1 it would book about 2.5 billion euros in markdowns on top of 2.3 billion euros in 2007.
Deutsche Bank’s Investment Banking unit did particularly poorly. The division accounted for nearly half of last year’s earnings, but reported a 1.6 billion euro pre-tax loss this quarter, far outpacing the 903 million euro analyst consensus and well below the 2.2 billion euro profit it posted last year.
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