Deutsche Bank's third quarter results are better than expected, with the investment bank division taking less of a hit than already announced, and the retail business posting very strong earnings.
Compared to its Wall Street competitors, the banking giant suffered among the lowest losses due to the financial turmoil of the last months, and even see's new chances ahead for a strengthened and solid bank.
As a major player in investment banking, and one of the worlds big wealth managers, we will possibly benefit from a 'run towards quality', Chief Executive Josef Ackermann said Wednesday in Frankfurt.
At the first glance, the profit of 1.63 billion euros that was even 31 percent higher compared to one year before looks very good. But among the profits and cost reductions, that offset the loss in the invest bank division, were also one-time effects like tax effects and the sale of minor holdings.
The investment banking revenue from July to September was 60 percent lower, leading to a loss of 179 million euros, the first negative result since 5 years. But the write-downs were lower than forecasted and expected by the market, and especially were surprisingly lower than those of several competitors, even though Deutsche Bank is strongly engaged in the fixed-income assets market.
I think the subprime crisis in the United States of America hasn't ended yet, Ackermann also said. We will see further problems arise ,but the impacts on the financial markets would be contained now, and Deutsche Bank will not be effected by a worsening of subprime.
Ackermann confirmed the goal for 2008 of a pretax profit of 8.4 billion euros - under the condition that markets function properly.