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Deutsche Bank expects to post 2Q profit

ASSOCIATED PRESS

9:22 a.m. July 2, 2008

FRANKFURT, Germany – Deutsche Bank AG said Wednesday that market uncertainty and a wavering global economy was unlikely to result in a second-quarter loss.

The announcement came a day after shares of Germany's biggest bank tumbled about 4 percent. Its shares rose 4.7 percent to 54.49 euros ($85.92) Wednesday in Frankfurt.

In a statement released before the German stock market opened, Deutsche Bank said that “based on its current expectations, it anticipates reporting a profitable second quarter. Its earnings report is to be released July 31.

The company also said its Tier 1 capital ratio – essentially, its ratio of cash to debt – would remain above 9 percent and therefore did not anticipate any need to raise more capital, dispelling market concerns to the contrary.

Other banks have had to seek more capital recently as a result of losses related mainly to the U.S. subprime mortgage crisis. Securities backed by such loans have been sold to banks around the world, and the value of the securities has fallen as defaults rose on subprime loans.

In June, UBS, Switzerland's largest bank, said it completed a 15.97 billion franc ($15.6 billion) capital hike to overcome its exposure to those losses.

Meanwhile, late last year, UBS announced it had raised billions through share sales to sovereign wealth funds in Singapore and the Middle East. The Government of Singapore Investment Corp. also injected $9.75 billion, while an undisclosed investor in the Middle East purchased a $1.7 billion stake in UBS.

In February French Bank Societe General SA asked investors to fund a 5.5 billion euro ($8.7 billion) capital increase to cover its losses, which were also linked to rouge trader Jerome Kerviel .


 On the Net:
www.deutschebank.com



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