Deutsche Bank posts first annual loss of $5bn

The biggest German bank, Deutsche Bank, on Thursday posted its first ever annual loss but said it would still pay a dividend of 50 euro cents per share.

The bank said it had made a net loss of €3.9 billion ($5 billion; Dh18.4 billion) for all of 2008, a figure that reached €4.8 billion in the fourth quarter.

"Operating conditions in the quarter were completely unprecedented, and exposed some weaknesses in our business model," a statement quoted Deutsche Bank chairman Josef Ackermann as saying.

But "since the trust and support of our shareholders is critical for us, we recommend a dividend for the year 2008 of 50 cents per share," he added.

That is well below the €4.50 per share dividend paid in 2007 however.

The bank confirmed figures first announced on January 14.

"Looking forward, we see continuing very difficult conditions for the global economy," Ackermann said.

He nonetheless added: "We are convinced that Deutsche Bank will emerge successfully from the current crisis."

The bank managed to increase its core capital ratio from 8.6 per cent of total assets at the end of 2007 to 10.1 per cent at the end of last year, the statement said.

It also took provisions for credit losses worth a total €1.1 billion, an increase of 76 per cent from the previous year.

Ackermann said he remained committed to the bank's business model which is focused on investment banking, a lucrative field in which Deutsche Bank is one of the global leaders but which has suffered sustained turmoil since mid 2007.

"In investment banking, we are market leaders in areas which have continued to perform well throughout the crisis," he stressed.

But the bank was also "repositioning our platform in some core businesses," the chairman acknowledged.

In the last three months of 2008, Deutsche Bank posted a net revenue loss of €885 million, compared with a €7.3 billion profit in the same period one year earlier, when the international banking crisis was already underway.

In its corporate and investment bank unit, revenues for the quarter showed a loss of €3 billion, compared with a €4.5 billion profit in 2007.

For the full year 2008, Deutsche Bank revised the value of its assets lower by €7.0 billion, more than three times the write-downs of €2.3 billion in 2007.

In the fourth quarter of last year alone, asset write-downs amounted to €5.3 billion.

 

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