27/10/2010 16:51
Deutsche Bank announced a €1.2bn loss in the third quarter stemming from its planned acquisition of Postbank but said a recent strong rebound in trading had lifted underlying results.
Without the already announced €2.3bn charge for Postbank, net income for the quarter would have been €1.1bn, more or less in line with market forecasts. In the same quarter last year Germany’s biggest bank had net income of €1.4bn.
The results on Wednesday come after Deutsche’s €10.2bn rights issue to help pay for Postbank and bolster its capital to meet stricter regulations. Josef Ackermann, chief executive, said Deutsche intended to balance earnings towards an even more stable business – a long-time goal that has been overshadowed by the bank’s continued heavy reliance on its trading and investment banking activities.
Deutsche’s quarterly revenues, excluding the Postbank charge, were slightly higher than a year ago at €7.3bn.
Quarterly revenues in Deutsche’s investment banking unit fell slightly from €4.4bn a year ago to €4.2bn. The German lender signalled last month that the quarter had included difficult months, but later comments by Mr Ackermann suggested that the bank had seen an improvement towards the end of the quarter – which the bank confirmed on Wednesday, saying there was a strong rebound in late September.
Debt sales and trading revenues rose 5 per cent to €2.2bn, but equity sales and trading revenues fell from €873m to €650m. Deutsche Bank shut down its dedicated equity proprietary trading business during the quarter, following a substantial reduction in trading on the bank’s own behalf after big losses in the financial crisis.
Pre-tax profits in investment banking and trading rose from €981m to €1.1bn.
Acquisitions boosted other lines of business. Revenues rose 29 per cent to €852m in Deutsche’s global transaction banking business after its purchase of the former ABN Amro commercial banking business in the Netherlands, while a 32 per cent rise in revenues in asset and wealth management was largely due to €200m of revenues from Deutsche’s acquisition last year of Sal Oppenheim. But assets under management declined slightly, which Deutsche put down mainly to the weaker dollar.
Revenues from retail banking – the area that Deutsche hopes to strengthen by buying Postbank – rose 5 per cent to €1.5bn. Pre-tax profits in this area rose by €96m to €245m, with lower provisions compared with last year here and across the bank.
The €2.3bn Postbank charge relates to Deutsche having to revalue its existing holding of just under 30 per cent in its domestic competitor as well as the value of an exchangeable bond through which it will acquire more of Postbank in 2012.
Deutsche is in the middle of a tender offer to Postbank minority investors, hoping to take control of the bank this year. It needs about two-thirds of minority investors to accept its €25-a-share offer, which ends next month.
Without the already announced €2.3bn charge for Postbank, net income for the quarter would have been €1.1bn, more or less in line with market forecasts. In the same quarter last year Germany’s biggest bank had net income of €1.4bn.
The results on Wednesday come after Deutsche’s €10.2bn rights issue to help pay for Postbank and bolster its capital to meet stricter regulations. Josef Ackermann, chief executive, said Deutsche intended to balance earnings towards an even more stable business – a long-time goal that has been overshadowed by the bank’s continued heavy reliance on its trading and investment banking activities.
Deutsche’s quarterly revenues, excluding the Postbank charge, were slightly higher than a year ago at €7.3bn.
Quarterly revenues in Deutsche’s investment banking unit fell slightly from €4.4bn a year ago to €4.2bn. The German lender signalled last month that the quarter had included difficult months, but later comments by Mr Ackermann suggested that the bank had seen an improvement towards the end of the quarter – which the bank confirmed on Wednesday, saying there was a strong rebound in late September.
Debt sales and trading revenues rose 5 per cent to €2.2bn, but equity sales and trading revenues fell from €873m to €650m. Deutsche Bank shut down its dedicated equity proprietary trading business during the quarter, following a substantial reduction in trading on the bank’s own behalf after big losses in the financial crisis.
Pre-tax profits in investment banking and trading rose from €981m to €1.1bn.
Acquisitions boosted other lines of business. Revenues rose 29 per cent to €852m in Deutsche’s global transaction banking business after its purchase of the former ABN Amro commercial banking business in the Netherlands, while a 32 per cent rise in revenues in asset and wealth management was largely due to €200m of revenues from Deutsche’s acquisition last year of Sal Oppenheim. But assets under management declined slightly, which Deutsche put down mainly to the weaker dollar.
Revenues from retail banking – the area that Deutsche hopes to strengthen by buying Postbank – rose 5 per cent to €1.5bn. Pre-tax profits in this area rose by €96m to €245m, with lower provisions compared with last year here and across the bank.
The €2.3bn Postbank charge relates to Deutsche having to revalue its existing holding of just under 30 per cent in its domestic competitor as well as the value of an exchangeable bond through which it will acquire more of Postbank in 2012.
Deutsche is in the middle of a tender offer to Postbank minority investors, hoping to take control of the bank this year. It needs about two-thirds of minority investors to accept its €25-a-share offer, which ends next month.
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