Sub-prime crisis hits Deutsche bank

31 October 2007

Deutsche bank has become the latest financial institution to report losses caused by the impact of the global downturn in the financial markets.

The collapse of the US sub-prime market has hit Deutsche hard, with the organisation announcing a pre-tax loss of $258 million at its City-based investment division during the third quarter of this year.

Deutsche also reported a charge of $3.1 billion during the third quarter which was caused by the sub-prime crisis affecting the global markets.

Josef Ackermann, chief executive at Deutsche Bank, described the three months to the end of September as "extremely turbulent".

However, the bank as a whole did report an improvement in its anticipated performance for the period, despite the problems affecting its investment arm.

Pre-tax earnings across the group were reported to be $2 billion. While this represents a 19 per cent decrease on the same period last year, it is higher than the earnings expected by the company only a few weeks ago.

Mr Ackermann said: "Our 'stable' businesses performed well and we reaped the benefits of some recent investments."

He concluded: "As a result, I am pleased to report that, overall, our businesses turned in a satisfactory result."

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