Deutsche Bank posted its first quarterly loss in five years as net after minorities turned to a loss of €131 million from a gain of €2.121 billion, weighed down by €2.7 billion in mark-downs due to the financial crisis.
The first-quarter pretax declined to a loss of €254 million compared to a gain of €3.163 billion a year earlier.
The figures largely matched analysts expectations for a pretax loss of €272 million and slightly exceeded their estimate for a net loss of €247 million.
Deutsche's result was weighed down by €1.770 billion net mark-downs on leveraged loans and loan commitments and €885 million mark-downs on commercial real estate loans and residential mortgage-backed securities.
Overall, the charges came to €2.7 billion, slightly higher than previously forecast. Deutsche had announced April 1st, that it anticipates first-quarter mark-downs of about €2.5 billion.
The impairment was partly offset by €854 million gains from the sale of industrial holdings. As of March 31st, Deutsche reduced its stakes in Allianz, Linde and Daimler compared to the end of last year.
Deutsche Bank said that according to its target definition, which excludes significant one-off gains, first-quarter pretax loss came to €1.1 billion, making the full year pretax profit target of €8.4 billion a distant prospect.
Chief executive Josef Ackermann said considering financial markets conditions in the months January through March were "the most difficult in recent memory" the bank's performance in the first quarter was "solid".
He said the bank's near-term outlook is highly uncertain but added that Deutsche is "well positioned to emerge stronger than ever from the crisis".
"We are equally determined to meet near-term challenges and to take advantage of longer-term opportunities," he said in the interim report.
Pretax return on equity came to minus 3 per cent on an adjusted basis compared to plus 44 per cent a year earlier. Deutsche targets a sustainable annual RoE of 25 per cent excluding significant one-offs.
Deutsche's tier 1 capital ratio stood at 9.2 per cent and the bank said it set aside a dividend accrual equivalent to 25 per cent of the 2007 dividend of 4.50 per share. This indicates that it plans to pay a similarly high dividend for the current year.
In the first quarter, net interest income rose 30 per cent to €2.676 billion as loan loss provisions were up 16 per cent to €114 million.