Deutsche Bank, Germany’s largest bank, said Tuesday it will miss itsprofit target for the current year in face of the financial market turbulence.
The announcement sent Deutsche Bank shares into a tailspin on theFrankfurt stock exchange, where they were among the biggest losers, shedding 1.56 euros or 6.1 percent to 24.18 euros in a sharply weaker market.
In face of “ongoing market turbulence, our planned pre-tax target of 10 billion euros ($13.2 billion) from our core businesses is no longer achievable for 2011,” Deutsche Bank said in a statement.
The “intensifying European sovereign debt crisis led to sustained uncertainties among market participants in the third quarter and thus to significantly reduced volumes and revenues,” in particular for Deutsche Bank’s corporate banking and securities business, chief executive Josef Ackermann told an investors’ conference in London.
“In response to the significant and unabated slowdown in client activity, Deutsche Bank will consider additional cost controls beyond those already implemented” at its corporate and investment banking division.
“This will lead to a reduction in headcount by around 500 positions” in the division in the fourth quarter of this year and the first quarter of next year.
The job cuts would be implemented “primarily outside Germany.”
Deutsche Bank said it would write off around 250 million euros ($330 million) on Greek sovereign debt in the third quarter.
“Nevertheless, we will be profitable in the third quarter and expect a robust earnings level for the full year 2011,” Ackermann said.
“We are confident that the classic banking businesses — private clients, asset management and global transaction banking — as a whole will deliver their best pre-tax profit ever.”
Deutsche Bank would published detailed third-quarter earnings on October 25, it said.
Raw Story is a progressive news site that focuses on stories often ignored in the mainstream media. While giving coverage to the big stories of the day, we also bring our readers' attention to policy, politics, legal and human rights stories that get ignored in an infotainment culture driven solely by pageviews.
Founded in 2004, Raw Story reaches 5 million unique readers per month and serves more than 19 million pageviews.