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Deutsche Bank posts another loss
FRANKFURT, Germany -- Deutsche Bank managed to narrow its fourth-quarter loss as it sold businesses to adjust to weak stock markets and deepening economic gloom. Germany's biggest bank said on Friday it made a loss of 105 million euros ($113 million) in the three months to December 31, 2002. That was down from the previous fourth-quarter loss of 1 billion euros. At the pretax profit level the bank was in the black but still missed analysts' expectations. The bank posted a fourth-quarter pretax profit of 237 million euros after a loss of 1.1 billion euros a year ago. Analysts polled by Reuters had expected a pretax figure of about 404 million euros as the bank cut costs and reduced the amount of money it set aside in the October-December period for possible bad debts. Deutsche's stock, which has fallen more than 40 over the last 12 months, was down 0.8 percent to 38.72 euros in early Frankfurt trading on Friday. Faced with a nearly stagnant German economy and a global downturn in investment banking, Chief Executive Josef Ackermann has sought to cut reduce bank's operations. The bank expects to cut costs by two billion euros by the end of 2003 and cut more than 14,000 jobs. "Last year we concentrated on streamlining the bank,'' Ackermann said in a statement. "Our loan loss provisions have peaked and our costs base is falling. "Following a strong start to 2003 we are confident that Deutsche Bank's transformation has prepared it to take full advantage of global market conditions." Deutsche Bank, which had loaned money to failed German construction company Babcock-Borsig and U.S. telecom operator WorldCom, said it had reduced the amount of money it set aside for bad loan to 423 million euros, down from a peak of 790 million euros in the third quarter of 2002. The bank said its retail banking operations in Germany were increasingly profitable and that income of its private client and asset management division before non-operating costs jumped to 1.1 billion euros in 2002 from 300 million the year before. "The trading and commission income look weak at first glance,'' Metehan Sen, analyst at Sal. Oppenheim, told Reuters. "But when you consider the U.S. banks had declines of 35 to 50 percent in the fourth quarter, Deutsche's minus 17 percent does not look so bad. It looks as though they will win market share." The bank said 2002 costs fell 17 percent and it would propose an unchanged dividend of 1.30 euros per share. It also said its core capital ratio, a measure of financial health, had risen in the last quarter to 9.6 percent from 8.9 percent at the end of September, a level well above that of two of its struggling rivals, Commerzbank and HVB Group. The bank booked gains of about 530 million euros in the quarter for the sale of stakes in companies like tyre-maker Continental and stock exchange operator Deutsche Boerse, but these were offset by writedowns of more than 600 million euros.
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