Deutsche Bank braces for huge losses
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Germany's largest bank said it expected to post net losses of close to 4 billion euros for the year 2008, after anticipating a staggering €4.8bn net loss for the 4th quarter. Deutsche Bank said the results reflected "exceptional market conditions".
AFP - Deutsche Bank, the biggest German bank, said Wednesday it expected a 2008 net loss of around 3.9 billion euros (5.2 billion dollars).
In the fourth quarter, the net loss would amount to around 4.8 billion euros, a statement said.
"For the full year 2008, the bank currently anticipates a loss after tax in the region of 3.9 billion euros," the statement said.
For the last three months of the year, "the bank currently anticipates a loss after taxes in the region of 4.8 billion euros," it added.
The results "reflects exceptional market conditions, which severely impacted results in the sales and trading businesses," Deutsche Bank said.
Measures taken to reduce the bank's exposure to risk also contributed to the loss, it added.
The bank's final results for 2008 are to be released on February 5.
Banks worldwide are moving to protect themselves from risky investments that have soured amid the international financial crisis, an operation known as de-leveraging.
They often have to reevaluate the value of such investments sharply lower, which impacts their bottom line.
At the end of the fourth quarter, Deutsche Bank said it expected to have a ratio of core capital to overall assets of 10 percent, its published target.
That would bring the closely-watched ratio into line with other sound European banks.
Deutsche Bank shares plunged by 6.27 percent to 22.75 euros following the announcement, while the DAX index of leading shares was off by 1.53 percent overall.
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