Deutsche Bank posts €777m third quarter profit after Greek debt writedown
DEUTSCHE Bank made €777m in net profit in a a rocky third quarter. This beat analysts’ best estimates.
The third-quarter earnings figure contrasts with a loss of €1.2bn in the same quarter last year, when the bank took a €2.3bn writedown related to consolidating its acquisition of Postbank.
CEO Josef Ackermann cited stronger results from the bank’s basic banking business and an effort to cut
risky business at its investment banking operation amid market swings caused by Europe’s debt crisis.
He said it was the toughest quarter since the one that followed the collapse of US investment bank Lehman Brothers in late 2008.
“During the third quarter, the operating environment was more difficult than at any time since the end of 2008, driven
by a deteriorating macro-economic outlook, and significant financial market turbulence,” he added.
Mr Ackermann said the bank “benefited significantly from the strategic decisions we have taken to recalibrate and de-risk our investment bank, increase the earnings contribution from our ‘classic’ banking businesses, and strengthen our capital, liquidity and funding position.”
The bank, Germany’s largest, also wrote down €228bn worth of Greek bonds, whose value has fallen during the debt crisis.
The bank had already signalled the Greek writedown and, because of it, said it would not achieve its profit target for this year.
In last year’s third quarter, revenues were reduced by the Postbank charge; if that is excluded, revenues were
essentially unchanged from a year ago.
Lower investment banking revenues were offset by higher retail and commercial banking revenues, primarily reflecting the addition of Postbank and its large branch banking network.