GERMAN lender Deutsche Bank has revealed a fourth-quarter pre-tax profit well below estimates as a result of restructuring costs.
The bank reported pre-tax profits of approximately €700m (£598.5m) for the last three months of 2010, down on its €756m posting for the same period the year before.
Released in a surprise preliminary statement last night, the bank also said it was set to post a net income of just €600m, less than half of the €1.3bn recorded for the same period in 2009, a figure influenced by a tax credit.
Analysts had anticipated a 70 per cent increase to approximately €1.3bn in pre-tax profits and around €889m in net income for the bank.
However, Deutsche Bank said it had recorded total net revenues of approximately €7.4bn, up from €5.5bn recorded for the same period in 2009.
Germany’s biggest lender said the acquisition of Deutsche Postbank had hit profits, as it worked to realign its business.
Deutsche Bank secured a 21.48 per cent stake in the Bonn-based lender in November, adding to its existing 30 per cent holding at a combined cost of €6.3bn.
The bank said it had “accelerated investments made to realign the bank” through the consolidation of Postbank and its wealth manager Sal. Oppenheim.
Chief executive Josef Ackermann had set an ambitious target of €10bn in pre-tax profits for this year and may have viewed accelerated consolidation of the bank’s acquisitions over the final period of last year as a means to maximise profits in 2011.
Ackermann told German magazine Focus that he would not extend his contract beyond 2013, when he turns 65.
In an issue published yesterday, he said: “Prolonging one’s term indefinitely until one falls off the chair is not a solution.”
Deutsche Bank is due to publish its full fourth-quarter results on Thursday this week.