Deutsche profits drop on asset writedowns

31 July 2008

Deutsche Bank has released its latest net earnings, with second-quarter profits declining to $999 million.

Credit crunch-related asset writedowns, which led to the firm's securities unit making a loss for the three-month period, contributed to the 64 per cent drop in profits.

A total of $3.6 billion was lost in this way.

However, the overall quarterly earnings exceeded the expectations of analysts polled recently by news agency Bloomberg.

Commenting, Deutsche Bank chief executive Josef Ackermann said: "The second quarter of 2008 proved to be another very challenging quarter for the banking industry.

"We remain cautious for the remainder of 2008 [and] continue to strictly manage cost, risk and capital, and to reduce our exposures in key areas."

Around $476 billion of credit devaluations and writedowns have been registered by global financial firms since the onset of the credit crunch last summer.

This is mainly due to banks buying up complex financial products linked with mortgages - which then lost value as property markets declined.

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