Deutsche Bank Posts First Loss in Five Years
Deutsche Bank
(DB) - Get Report
, Germany's largest bank, reported its first quarterly loss in five years, the result of lower revenues and writedowns to leveraged loans and loan commitments, commercial real estate and residential mortgage-backed securities.
The bank posted a loss of 141 million euros, or 27 euro cents per share, compared to a gain of 2.13 billion euros, or 4.47 euros per share, in the first quarter last year. Overall net revenues were 4.6 billion euros vs. 9.6 billion euros a year ago.
Deutsche Bank's loss was fueled by a writedown of 2.7 billion euros, slightly more than the 2.5 billion euros it anticipated
.
CEO Josef Ackermann said financial markets in the first quarter were "the most difficult in recent memory," and that "pressure on the banking sector was more intense than at any time since the current credit downturn began."
The bulk of the bad news was in the corporate and investment bank, which lost 1.4 billion euros. Revenues in that division were 1.5 billion euros, compared to 6.7 billion euros a year earlier. The private client and asset management division was more stable, earning 492 million euros. Its revenues rose by 1% from a year ago, to 2.5 billion euros.
Deutche Bank shares were down fractionally in recent trading on the
New York Stock Exchange
, to $119.47.
The bank's writedown, while larger than expected, was smaller than some of its rivals on both sides of the Atlantic.
UBS
(UBS) - Get Report
earlier this month said it expects to write down $19 million, while
Credit Suisse
(CS) - Get Report
wrote down 5.3 billion Swiss francs when it reported last week.
Royal Bank of Scotland
(RBS) - Get Report
earlier this month said it was raising $23.9 billion to cover an $11.7 billion loss tied to the U.S. mortgage market.
Meanwhile, big U.S. banks like
Citigroup
(C) - Get Report
and
Merrill Lynch
(MER)
swung to first-quarter losses on writedowns to securities tied to mortgages.