Deutsche Bank expects huge loss

Bloomberg

Frankfurt-based Deutsche Bank said yesterday the loss also reflects increased provisions for debt backed by bond insurers and "other exceptional gains and charges."

Deutsche Bank had been scheduled to publish fourth-quarter results early next month.

The losses reflect "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.

Deutsche Bank shares fell as much as 8.3 percent in Frankfurt trading and were down 1.41 euros, or 5.3 percent, to 22.86 euros by 11:06 a.m. yesterday.

Goldman Sachs Group, Morgan Stanley, JPMorgan Chase & Co. and Credit Suisse Group also have reported trading losses after the September bankruptcy of New York-based Lehman Brothers Holdings. All the banks, except Goldman Sachs, have said they are shutting down some proprietary-trading operations.

Goldman Sachs and JPMorgan of New York, which along with Deutsche Bank mostly sidestepped the meltdown of the U.S. subprime mortgage market, face losses as investment-grade bonds had the worst performance in at least 35 years and stock markets headed for their biggest rout.

Meanwhile, Barclays, Britain’s fourth-biggest bank, plans to eliminate as many as 2,000 jobs in its retail, commercial-banking and credit-card units, adding to cuts announced Tuesday.

"We will take all possible measures to mitigate compulsory redundancies through redeployment, using natural attrition, releasing of contractors, closing vacancies and opening voluntary redundancy registers," the London-based company said yesterday in a statement.