Deutsche Bank quarterly profit plunges as debt crisis hits earnings (correction)

Feb 2, 2012, 8:11 GMT

Frankfurt - Germany's biggest bank, Deutsche Bank, said Thursday its fourth quarter profit plunged 69 per cent after Europe's debt crisis hit the group's market trading operations.

The Frankfurt-based bank said net income dropped to 186 million euros (245 million dollars) in the final quarter of 2011, from 605 million euros in the same period a year earlier. Total fourth quarter net revenues were down 7 per cent at 6.89 billion euros, the bank.

'Current quarter performance was severely impacted by ongoing concerns around the European sovereign crisis and an overall uncertain macroeconomic environment,' the bank said in a statement.

'This resulted in significantly reduced client activity across the industry and a decline in volumes across many products,' the bank said.

The results are a rather sobering farewell for Deutsche chief executive officer Josef Ackermann, who steps down from his post at the end of May.

'Once again, Deutsche Bank has proved its ability to deliver substantial earnings in challenging conditions,' Ackermann said in a statement.

The bank posted a pre-tax loss of 351 million euros in the fourth quarter after reporting a pre-tax profit of 707 million euros in the same quarter of 2010.

This followed additional write-downs on Greek bonds, losses at its investment bank unit and charges for possible legal action in the United States hit the results.

In November, Deutsche abandoned its pre-tax profit forecast of 10 billion euros for 2011 and said it was cutting 500 job cuts amid the economic and financial market tensions unleashed by the debt crisis.

The bank said income from trading bonds and other securities fell 35 per cent in the final three months of last year, while equity trading posted a 38-per-cent drop in revenue.

However, Deutsche said it booked net profits of 4.3 billion euros for the full year 2011, up from 2.3 billion euros in 2010.