German banking giant Deutsche Bank on Tuesday said it posted a first-quarter loss of 141 million ($219.9 million), or 27 cents a share, amid of 2.7 billion worth of write-downs related to leverage loans, loan commitments, commercial real estate and residential mortgage bonds backed by alt-A home loans.
“In the month of March, pressure on the banking sector was more intense than at any time since the current credit downturn began. Inevitably, this left its mark on Deutsche Bank’s results,” Josef Ackermann, chairman of Deutsche’s management board, said in a prepared statement.
Deutsche’s corporate and investment bank business saw net revenues of 1.5 billion in the first quarter, down from 6.7 billion in the first quarter of 2007. Corporate banking and securities net revenues fell to 880 million euros in the first quarter from 6.1 billion in the first quarter of 2007, while revenues sales and trading — debt and other products — were at 1.3 billion, down from 3.4 billion in the same period a year ago.
Much of the drop in sales and trading of debt was tied to markdowns on commercial real estate related activities and on RMBS as well as lower revenues in the bank’s credit trading business. At the same time, sales and trading saw growth in revenues tied to foreign exchange and money market trading as well as core fixed-income trading and commodities trading.
Revenues in sales and trading of equities were 745 million, down from 1.7 billion euros in the prior year’s first quarter because of lower revenues in equity derivatives trading and a “modest” loss in designated proprietary trading. Meanwhile, revenues in Deutsche Bank’s advisory business were 128 million euros, down from 250 million euros, while revenues in origination of debt fell 1.4 billion euros, down from 401 million in the first quarter of 2008. Much of that drop, the banking giant said, was tied to markdowns of 1.8 billion worth of leveraged debt.
Deutsche Bank’s global transaction banking saw net revenues climb 8% to 661 million because of growth in clients volumes that counterbalanced the adverse impact of lower interest rates and a drop in the US dollar.
The bank also said that tier 1 capital ratio at the end of the quarter was 9.2%.
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