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Deutsche Bank reports euro4.8 billion 4Q loss

Deutsche Bank reports euro4.8 billion 4Q loss

Deutsche Bank AG, Germany's biggest bank, said Wednesday it lost an estimated euro4.8 billion ($6.4 billion) in the fourth quarter last year as the global economic downturn weighed heavily on its bottom line.
Deutsche Bank said the loss after taxes, based on preliminary figures, will likely lead to a full-year loss for 2008 of about euro3.9 billion.
"We are very disappointed at this fourth quarter result, which leads to a loss for the year," Chief Executive Josef Ackermann said in a statement.
The official report on fourth-quarter and full-year 2008 earnings is due for release Feb. 5.
"The exceptionally difficult market environment of the quarter exposed some weaknesses in our platform, and we have determined a number of measures to address these weaknesses," he added. "Implementation of these measures is already under way."
The bank said the loss "reflects exposure reduction and other de-risking measures," among other factors.
The bank had reported a profit of euro953 million for the final quarter of 2007 and a profit of euro6.5 billion for the full year 2007.
The news comes on the heels of an announcement last week that the German government was taking a 25 percent stake in Germany's second-largest bank, Commerzbank AG, in a deal that gave Commerzbank another euro10 billion in capital from the government's financial sector rescue fund.
At the time, Commerzbank CEO Martin Blessing said the funds would "enable us to fulfill our responsibility to offer loans" amid what he called an "economically stormy environment."
Deutsche Bank so far has not made use of the rescue fund, which has a total value of up to euro500 billion.
The bank said some of the "corrective adjustments" decided upon by the management board were already implemented in the fourth quarter, while more would follow in 2009.
"Our capital strength, which was successfully maintained, allowed us to withstand these extremely difficult market conditions and to take necessary steps to de-risk our platform," Ackermann said.
"We have substantially reduced our exposures in leveraged finance, commercial real estate and other key credit market exposures, and expect no further material negative impact from these areas."
In addition, Ackermann said, the bank has scaled back or exited trading strategies most affected by market turbulence.
"We have significantly reduced trading assets, and thus reduced balance sheet leverage," he said.