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Deutsche Bank Posts Historic Loss, Rejects State Aid | ASHARQ AL-AWSAT English Archive 2005 -2017
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FRANKFURT (AFP) – Germany’s biggest bank, Deutsche Bank, on Thursday posted its first annual loss since World War II after a terrible fourth quarter but vowed to survive the financial downturn without state aid.

Chairman Josef Ackermann told reporters the bank did not require official assitance would pull out of the banking crisis on its own.

A Deutsche Bank statement said it had made a net loss of 3.9 billion euros (5.0 billion dollars) in 2008, a figure that reached 4.8 billion in the fourth quarter alone.

In 2007, Deutsche Bank had reported a record profit of 6.5 billion euros.

While other major German banks have benefited from a government rescue plan for the sector, Ackermann told a press conference: “We want Deutsche (Bank) to succeed in pulling out of this crisis by itself.”

Ackermann added that he saw no “dramatic” risks in the bank’s accounts.

The statement had quoted him earlier as saying that “operating conditions in the (fourth) quarter were completely unprecedented and exposed some weaknesses in our business model.”

He acknowledged being “very disappointed” at the quarterly figures but said that “since the trust and support of our shareholders is critical for us, we recommend a dividend for the year 2008 of 50 cents per share.”

The Deutsche Bank chairman told media that results seen so far this year left him “with all due precaution, confident for 2009.”

He added that an ongoing tie-up with the German Postbank should produce savings of 120-140 million euros per year within three to four years.

After initially driving down the bank’s share price in the absence of a detailed outlook for 2009, investors appeared to be reassured by Ackermann’s comments.

The bank’s stock nonetheless showed a drop of 2.35 percent to 20.74 euros in late morning Frankfurt trading after plunging by more than 9.0 percent in early deals.

The DAX index of leading shares was 0.73 percent lower overall.

The bank said it managed to increase its core capital ratio from 8.6 percent of total assets at the end of 2007 to 10.1 percent at the end of last year.

The so-called Tier 1 ratio is a measure of financial strength and is being closely watched by analysts for indications of how well-equipped banks are to cope with the current market crisis.

Deutsche Bank also took provisions for credit losses worth a total 1.1 billion euros, an increase of 76 percent from the previous year.

Ackermann said he remained committed to the bank’s business model, which is focused on investment banking, a lucrative field in which Deutsche Bank is one of the global leaders.

The sector has nonetheless suffered sustained turmoil since mid 2007.

“In investment banking, we are market leaders in areas which have continued to perform well throughout the crisis,” he stressed.

But the bank was “repositioning our platform in some core businesses,” the chairman acknowledged.

For the full year 2008, Deutsche Bank revised the total value of its assets lower by 7.0 billion euros, more than three times the 2007 write-downs of 2.3 billion euros.

In the fourth quarter alone, asset write-downs amounted to 5.3 billion euros.