Private equity dents Deutsche profits

The German giant is the latest investment bank to write down the value of its private equity portfolio.

Deutsche Bank has announced disappointing second-quarter results, causing is share price to shed over 2 per cent in early trading in Frankfurt.

Deutsche said net profits were down 49 per cent from a year ago, totaling E1.42bn. No less than E1.2bn came from investment sales including the E1bn disposal of a stake in Munich Re, the German reinsurer.

Part of the problem facing the bank is a E700m write down in assets from its private equity and real estate businesses. Other factors putting pressure on Deutsche were a 10 per cent rise in administrative costs to E5.46bn and a sharp increase in loan loss provision, up more than 100 per cent at E245m.

Deutsche is the first European bank to announce results for the second quarter. Observers expect few of its rival will escape the current market difficulties that have caused problems in international investment banking.