Deutsche Bank announced Wednesday it will take charges of about €2.2 billion ($3.09 billion) in Q3 but still forecasts a rise in net profit for the period of more than €1.4 billion ($2 billion). The bank also affirmed its 2008 forecast of a pretax profit of €8.4 billion. Its shares gained 2.6% in Frankfurt trading following the announcement. The bank will take a charge of up to €700 million on its leveraged loans and loan commitments and another €1.5 billion charge on its structured credit products and residential mortgage-backed securities. The corporate banking and securities unit is thus forecast to report a pretax loss of about €250-350 million in Q3. "Despite a challenging quarter for our investment banking franchise, our 'stable' businesses continue to perform well. We see substantial opportunities in investment banking after this period of correction," said CEO Josef Ackermann. Pretax income for Q3 is projected at about €1.2 billion. Two days ago, UBS announced it will take a write-down of around $3.4 billion (full story). On the same day, Citigroup said it will take a 60% profit hit (full story) due to its exposure to the roiling credit markets.
Sources: Reuters, MarketWatch, Bloomberg, Wall Street Journal
Commentary: Deutsche Bank May Write Down €1.7B in Debt - report • Deutsche Bank To Write Down Leveraged Loans in Q3 • Deutsche Bank Says Asset-Backed Fund Down 30%, But No Exposure to Subprime
Stocks/ETFs to watch: DB. Competitors: C, UBS. ETFs: EWG
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