More European Banking Horror: Deutsche Bank Hit by Writedowns as Crisis Worsens
April 1st, 2008There’s an infamous Cryptogon post that doesn’t mention Deutsche Bank at all. Get me?
* wink * * wink *
Today’s Reuters article says, “Deutsche is facing hurdles in, for example, leveraged finance and structured credit.”
* wink * * wink *
Hint: I didn’t work for Deutsche Bank.
Ok, that’s it. Comments are off. Take it or leave it. Your mileage may vary.
Via: Reuters:
Deutsche Bank more than doubled writedowns in the wake of the global credit crisis, casting a pall over the prospects for the bank that had been seen as little affected by the melt-down.
Warning investors on Tuesday that conditions had deteriorated dramatically in recent weeks, Chief Executive Josef Ackermann said the bank would write down 2.5 billion euros ($3.9 billion) in the first quarter on the value of loans it has committed to as well as other investments.
The news was overshadowed by rival UBS, which unveiled $19 billion of additional writedowns on U.S. property and related assets, pushing it $12 billion into the red in the first quarter and forcing it into a fresh hunt for funds.
Deutsche Bank, the country’s biggest financier, had been seen as one of the winners in the crisis that fatally wounded rival Bear Stearns and toppled other Wall Street titans.
But as conditions in global markets worsen, the bank is looking increasingly vulnerable.
The new write-down is equivalent to more than a third of its 2007 net profit and more than all the markdowns the bank made last year.
Last week, it warned that aftershocks could hit its 2008 profits. “Conditions have become significantly more challenging during the last few weeks,” it said on Tuesday. Deutsche is facing hurdles in, for example, leveraged finance and structured credit. Formerly a big money spinner, this market has ground to a halt as credit market turmoil spread.
