Page last updated at 08:06 GMT, Thursday, 31 July 2008 09:06 UK

Deutsche writes down 2.7bn euros

Deutsche Bank office
Deutsche Bank had originally appeared to be only lightly hit by the credit crunch

Deutsche Bank has written down another 2.7bn euros ($3.6bn; 1.8bn) between April and June, taking its credit crunch bill to more than 7bn euros.

Unlike many of its global rivals, Deutsche Bank managed to make a profit in the quarter even after the problems.

Pre-tax profits came in at 642m euros, well down on the 2.7bn euros it made in the same period a year earlier.

Almost half of the write-downs were caused by investments in assets that were backed by residential mortgages.

Exposure to monoline insurers, which guarantee the repayment of a bond if its issuer is unable to do so, as well as under-performing investments in commercial property, made up much of the rest of the write-downs.

"The second quarter of 2008 proved to be another very challenging quarter for the banking industry," said chief executive Josef Ackermann.

"We remain cautious for the remainder of 2008."

The credit crunch began in the US where it was sparked by record defaults on sub-prime mortgages. Sub-prime lenders provide financing to people with poor or non-existent credit histories.

It later emerged that many European banks had bought repackaged bundles of debts which were linked to US residential mortgages.

Some of the European banks have now been hit as hard as their US counterparts in terms of losses from the credit crunch.




RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific