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German bank eyes brighter days in Q1

DEUTSCHE Bank AG, Germany's biggest bank, said yesterday that it returned to a profit in the first quarter on a solid improvement in revenue after suffering big losses last year.

The Frankfurt-based bank said net profit for the January-March period came in at 1.2 billion euros (US$1.56 billion). It had a net loss of 141 million euros in last year's first quarter.

Revenue increased 57 percent to 7.2 billion euros from 4.6 billion euros in the first quarter of 2008.

Pretax earnings were 1.8 billion euros - a contrast with a loss of 254 million euros a year earlier.

Deutsche Bank said its tier 1 capital ratio, a measure of its liquidity, was 10.2 percent at the end of the first quarter, above its stated target of 10 percent.

Key quarter

"This was a key quarter for Deutsche Bank. Once again, we demonstrated our strength, as we have consistently throughout this crisis," CEO Josef Ackermann said in a statement. "But in this quarter, we also proved our earnings power. We have consistently delivered capital strength and balance sheet discipline, and sustained a healthy liquidity and funding position."

Ackermann said the company sees continued challenges for 2009, but did not offer a more detailed outlook.

The first-quarter profit compared with a huge 4.8-billion-euro net loss in last year's fourth quarter, which was blamed largely on big trading losses. That helped push Deutsche Bank to a full-year loss of 3.9 billion euros.

For the first quarter, Deutsche Bank reported large year-on-year revenue increases in several areas.

It had a 226-percent increase in corporate and investment banking revenues to 4.9 billion euros, compared with 1.5 billion euros in the first quarter of 2008.

The corporate banking and securities division saw a 377-percent increase in revenue to 4.2 billion euros from 880 million euros.

The division saw strong year-on-year growth in sales and trading of debt and in so-called flow products, including foreign exchange, money market and interest rate trading. Those products contributed 3.8 billion euros to the division's revenues, a 185-percent increase from a year earlier.

Global transaction banking revenues improved marginally to 666 million euros.


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