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Deutsche Bank announces bumper profit in first quarter

Latest update : 2009-04-28

Deutsche Bank announced a leap in first quarter net profit to 1.2 billion euros versus a 141 million euro loss in the same period last year. The results were boosted by an almost three-fold increase in revenue from debt trading and sales.

AFP - The biggest German bank, Deutsche Bank, posted strong first quarter results on Tuesday, the latest major bank in Europe and North America to offer hope for an eventual end to the financial crisis.

Deutsche Bank reported a net profit of 1.2 billion euros (1.56 billion dollars), far surpassing market expectations.

In the first quarter of 2008, Deutsche Bank had suffered a net loss of 141 million euros, and analysts polled by Dow Jones Newswires had forecast a net profit of 764 million euros this time around.

Bank chairman Josef Ackermann said: "This was a key quarter for Deutsche Bank. Once again we demonstrated our strength, as we have consistently throughout this crisis.

"In this quarter, we also proved our earnings power."

Deutsche Bank is the latest global bank to report solid first quarter results, along with peers Bank of America, Goldman Sachs and Credit Suisse, giving a glimmer of hope that the financial crisis could be past the worst.

Net bank revenues gained 56 percent to 7.2 billion euros from 4.6 billion in the same period a year earlier, a statement said.

Deutsche Bank nonetheless also said it had marked down the value of its assets by one billion euros, including 841 million taken as further provisions against possible losses related to monoline insurers.

They ensure the repayment of bond principal and interest when an issuer defaults.

Provisions taken against credit losses rose to 526 million euros from 114 million in the first quarter of 2008, the bank said.

But the bank's corporate banking and securities division posted sales and trading revenues of 3.8 billion euros, a leap of 185 percent on activites such as foreign exchange, money markets and Treasury bills.

"Looking forward, we see continued challenges, but also opportunities," Ackermann stressed, though the bank did not immediately provide a detailed outlook for 2009.

The results underscored the chairman's "firm belief that Deutsche Bank is well-positioned not only to weather the current crisis, but also to emerge stronger than ever in the medium term."

On Monday, Deutsche Bank extended Ackermann's contract by three years to 2013 after the data eased the memory of the bank's 2008 full-year loss of 3.9 billion euros, its first loss since the bank assumed its present form in 1956.

On Tuesday, the bank said its Tier 1 capital ratio, an important measure of financial strength, had risen to 10.2 percent at the end of the first quarter, above its published target of 10 percent.

Dow Jones Newswires quoted a trader who said the bank's figures were "good across the board," and that the Tier 1 ratio figure was particularly surprising.

 

Date created : 2009-04-28

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