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Deutsche Bank: Q3 profits shrink but higher than expected

10-26-2011 11:57 BJT

BERLIN, Oct. 25 (Xinhua) -- Germany's biggest lender Deutsche Bank on Tuesday reported that its third-quarter profits were 37 percent lower than the previous three months thanks to the escalating eurozone debt crisis, but the result was still far beyond experts' forecast and welcomed by markets.

The Frankfurt-based bank said that its net income in the third quarter reached 777 million euros (about 1.08 billion dollars), compared with a net loss of 1.2 billion euros in the same period last year when it faced a charge related to the purchase of Deutsche Postbank.

The bank said a year-on-year comparison of its third-quarter net income was of little importance, since last year's case was exceptional.

On the quarterly basis, the bank's profit in the July-September period was 64 percent lower than the first quarter this year and 37 percent lower than the second.

However, the current figure is more than twice as much as analysts' previous predictions, which put the gains at only about 350 million euros.

On Tuesday, share of Deutsche Bank rose 0.26 percent to 28.55 euros at the Frankfurt Stock Exchange.

"During the third quarter, the operating environment was more difficult than at any time since the end of 2008, driven by a deteriorating macro-economic outlook, and significant financial market turbulence," Deutsche Bank chief executive Josef Ackermann said in a statement.

The bank chief attributed the better-than-expected performance to "the strategic decisions we have taken to recalibrate and de-risk our investment bank, increase the earnings contribution from our 'classic' banking businesses, and strengthen our capital, liquidity and funding position."

The bank also said that it was confident to address challenges from the eurozone debt turmoil and possibly tougher demands of European regulators, without any outside aid or public money.

It said it has written down 228 million euros on Greek sovereign debt in the third quarter, and its exposure to the sovereign debt of heavily indebted eurozone countries, including Portugal, Italy, Ireland, Greece and Spain, had been reduced to 4.4 billion euros by September from 12.1 billion last year.

The bank said it would be able to fulfill stricter capital demands if European leaders, as earlier media reports suggested, decide to hold a ratio of assets to core capital at least nine-percent at the upcoming summit.

The bank's core capital ratio stood at 10.1 percent during the third quarter, it added.

 

 

Editor:Zhang Rui |Source: Xinhua

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