Deutsche Bank AG, Germany's biggest bank, has said the United States subprime collapse and slowing economic growth will make it harder to reach a full-year profit goal.
Deutsche Bank shares fell as much as 2.9 percent in Frankfurt trading after it said possible asset writedowns and a worsening economy would "adversely affect our ability to achieve our pretax profitability objective."
The bank aims for pretax earnings of 8.4 billion euros (US$13.2 billion), excluding one-time items.
The German bank boosted profit last year after skirting the worst of the US subprime-mortgage market crash that left UBS AG and Citigroup Inc with record losses. Deutsche Bank will probably have further writedowns on its 36.2 billion euros in loans for leveraged buyouts because of "deteriorating" prices, the company said in its annual report published yesterday.
"I'm not sure people actually expected them to reach the targets after what's happened to the markets," Derek Chambers at Standard & Poor's Equity Research in London, who has a "hold" recommendation on the stock, told Bloomberg News. "The immediate concern is leveraged loan writedowns. Conditions also remain difficult for fixed income, which is a large part of their business."
Deutsche Bank shares fell 1.61 euros, or 2.2 percent, to 71.89 euros by 11:07am, bringing declines this year to 20 percent and cutting its market value to 38.2 billion euros.