Deutsche bank expects losses

24 September 2007

Deutsche Bank's profits could be hit by up to $2.4 billion after its loans have dropped in value following the credit crisis, according to Reuters.

The credit crisis has made it hard for banks to sell their loans and now banks are writing down the value of these loans.

According to Reuters Deutsche bank was estimating that credit is now between four and six percent less valuable.

If this is the case the bank would be hit by $2.4 billion losses in this quarter, compared to the net profit of $1.7 billion it made in the same quarter last year.

Shares in the bank also fell by 1.6 per cent due to fears that the bank faces substantial 'writedowns' following the credit crisis.

The bank is hoping that customers will accept their new terms for the credit or drop the deals, one active banker told Reuters: "If you take a private equity buyer, the bank provides them with leveraged finance to so their deals, so it's in their interest to keep the relationship good."

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