Deutsche Bank reports record loss, warns about outlook

Business Materials 5 February 2009 12:49 (UTC +04:00)

Deutsche Bank AG's shares plunged Thursday after Germany's biggest bank reported a record fourth-quarter loss and warned it faced tough economic and financial conditions in the months ahead.

The Frankfurt-based bank's fourth-quarter net loss of 4.8 billion euros (6.2 billion dollars) compares with a profit of 953 million euros from a year earlier with its earnings taking a hammering from the turmoil that gripped global financial markets in the run-up to the end of 2008, reported dpa.

This also helped to pave the way for the full year record net loss in 2008 of 3.9 billion euros after reporting a record profit of 6.5 billion euros in 2007, Deutsche said, confirming figures released last month.

"We are very disappointed at our fourth quarter result, and at the consequent full year net loss in 2008," said Deutsche Bank chief Josef Ackermann commenting on the earnings.

"Looking forward, we see continuing very difficult conditions for the global economy, posing significant challenges for our clients and for our industry," he said with the bank having shed about 1,200 jobs as it faced up to the global financial crisis.

The bank is proposing to pay a 50 cents dividend for 2008 down from 4.50 euros in 2007.

Deutsche's key investment banking business reported a 5.8 billion-euro loss in the fourth quarter.

In early morning trading, Deutsche's shares had slumped by 4.5 per cent to 20.30 euros after rising this week on expectations that the bank would say it had turned a solid business performance in January.

Unlike many of its peers in the world financial sector, Deutsche Bank has not turned to the government for assistance to help it through the current economic and financial upheaval.

It also managed to sidestep the fallout from the crisis in global banking triggered by the US' risky subprime mortgage market.

Last month Ackermann said Deutsche was starting the new year "with some confidence" after it had disposed of high-risk high-yielding assets linked to the subprime crisis.