Deutsche Bank AG, Germany's largest bank, said second-quarter profit fell 64 per cent as €2.3 billion ($3.6 billion) in writedowns led to a second straight loss at its securities unit.
Net income dropped to €649 million, or €1.27 a share, from €1.78 billion, or €3.60, a year ago, the Frankfurt-based bank said on its web site today.
Chief executive officer Josef Ackermann said he "remains cautious" after the investment bank posted a €311 million pretax loss following markdowns on mortgage securities, loans and debt backed by bond insurers.
Deutsche Bank sidestepped the worst of the subprime contagion, which led to record losses and capital raisings at UBS AG and Merrill Lynch & Co.
"Deutsche Bank is strong in investment banking so the credit crisis has left its mark," Daniel Hupfer, who helps manage about $47 billion including Deutsche Bank shares at M.M. Warburg in Hamburg, said before the announcement.
"But the company has fared better than rivals such as UBS and many American banks."
Deutsche Bank dropped 34 per cent in Frankfurt trading this year, valuing the company at €31.2 billion.
The company reduced the value of residential mortgage- backed securities, mostly so-called Alt-A mortgages, by €1 billion.
It reported markdowns of €530 million on assets secured by bond insurers and €309 million on commercial real estate loans.
Loans for leveraged buyouts were written down by €200 million, and other investments by €203 million.
Deutsche Bank's second-quarter markdowns bring its total to about €7.3 billion.
Bloomberg