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German bank posts US$6.3b loss in Q4

DEUTSCHE Bank AG, Germany's biggest bank, reported a loss of about 4.8 billion euros (US$6.3 billion) in the fourth quarter after the worst financial crisis since the Great Depression pummeled its debt and equity trading results.

The bank fell as much as 8.3 percent in Frankfurt trading. The loss, which compares with a profit of about 1 billion euros a year earlier, also reflects increased provisions for debt backed by bond insurers and "other exceptional gains and charges," the Frankfurt-based bank said in a statement yesterday.

Deutsche Bank has "scaled back or exited trading strategies most affected by market turbulence," Chief Executive Officer Josef Ackermann said in the statement. The German bank lost about US$1 billion from bad bets involving bonds hedged by credit-default swaps in the quarter and US$500 million trading equities, two people with knowledge of the matter said this week.

The fourth-quarter loss reflects "exceptional market conditions, which severely impacted results in the sales and trading businesses, most notably in credit trading including its proprietary trading business, equity derivatives and equities proprietary trading," the bank said, according to Bloomberg News.

Deutsche Bank shares shed 2.02 euros, or 8.3 percent, to 22.25 euros by 11:59am in Frankfurt. The stock is down 20 percent in 2009.

The bank said it accrued a dividend of 50 cents a share for 2008, after paying 4.50 euros a share for 2007.

Goldman Sachs Group Inc, Morgan Stanley, JPMorgan Chase & Co and Credit Suisse Group AG have also reported trading losses after the September bankruptcy of New York-based Lehman Brothers Holdings Inc.


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