Business

Deutsche Bank warns of large loss

Deutsche Bank Image copyright Getty Images

Deutsche Bank has warned investors it will post a net loss of €6.2bn (£4.5bn) for the third quarter.

Higher capital requirements for its investment bank were partly responsible for the huge impairment charges of €5.8bn.

There was also doubt about the value of its Postbank retail division that Deutsche plans to sell.

Germany's biggest bank also said the dividend for the year could be cut or scrapped.

The group was also setting aside €1.2bn for legal costs.

Deutsche is embroiled in the Libor-rigging scandal and is being investigated by Swiss authorities for suspected price-fixing on the precious metals market.

Analysts had expected a net profit of about €1bn for the third quarter before the unexpected announcement on Wednesday night.

The bank also wrote down by €600m the value of its 20% stake in Hua Xia Bank, which it also plans to sell as it was no longer considered to be strategic.

The writedowns would not affect Deutsche's capital ratio, which stands at an expected 11% for the third quarter when measured by the most stringent test that is part of new European bank rules.

New chief executive John Cryan, who took over in July, is preparing to cut about 23,000 jobs - about a quarter of the workforce - in a bid to reduce costs, it was reported last month.

Deutsche Bank is due to publish its full third-quarter results on 29 October.

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