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Deutsche Bank beats estimates at $1.1 billion
Deutsche Bank net income at euro777 million, takes euro228 million Greek bond write-down
By The Associated Press

FRANKFURT, Germany (AP) ' Deutsche Bank AG said Tuesday that it made euro777 million ($1.1 billion) in net profit in a turbulent third quarter, beating analysts' estimates.

The third quarter earnings figure contrasts with a loss of euro1.2 billion in the year-ago quarter, when the bank took a euro2.3 billion writedown related to consolidating its acquisition of Postbank.

CEO Josef Ackermann cited stronger results from the bank's basic banking business and an effort to cut risky business at its investment banking operation amid market swings caused by Europe's crisis over heavily indebted governments.



He said it was the toughest quarter since the one that followed the collapse of U.S. investment bank Lehman Brothers in late 2008.

"During the third quarter, the operating environment was more difficult than at any time since the end of 2008, driven by a deteriorating macro-economic outlook, and significant financial market turbulence," he said in a statement.

He said the bank "benefited significantly from the strategic decisions we have taken to recalibrate and de-risk our investment bank, increase the earnings contribution from our 'classic' banking businesses, and strengthen our capital, liquidity and funding position.

The bank's ratio of highest-quality reserves to loans and other investments reached 10.1 percent. The so-called Core Tier 1 capital ratio is an important measure of a bank's ability to absorb losses. European leaders are seeking to push banks that are undercapitalized to hold at least 9 percent.

The bank, Germany's largest, also wrote down euro228 billion worth of shaky Greek bonds, whose value has fallen during the eurozone's government debt crisis.

The bank had already signalled the Greek writedown and said it won't make its profit target for this year.

Market analysts surveyed by Factset had forseen net profit of euro425 million. The company's net revenues for the quarter were euro7.3 billion, up euro2.3 billion, or 47 percent, from a year ago. In last year's third quarter revenues were reduced by the Postbank charge; if that is tossed out revenues were essentially unchanged from a year ago as lower investment banking revenues were offset by higher retail and commercial banking revenues, primarily reflecting the addition of Postbank and its large branch banking network.


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