Deutsche Bank blown off course by euro troubles

DEUTSCHE Bank yesterday blamed the European debt crisis for the scrapping of its annual profit targets as struggling UBS said it would stay in the black in the third quarter despite its “rogue” trading losses.

Shares in Deutsche Bank fell nearly four per cent after it said its €10bn (£8.62bn) pre-tax profit target is no longer within reach.

Chief executive Josef Ackermann (right) said: “The intensifying European sovereign debt crisis led to sustained uncertainties among market participants in the third quarter and thus to significantly reduced volumes and revenues.”

Bank shares have seen major falls in recent weeks as fears grow over slowing markets. Deutsche Bank, which did not give a revised profit figure, was hit especially hard in its corporate banking and securities division in the third quarter.

Ackermann said, however, the bank had boosted liquidity buffers to more than €180bn from €150bn previously and did not face a funding squeeze.

“Deutsche Bank had absolutely no refinancing problems, neither in 2008 nor in 2011.”

It will also take impairment charges on Greek sovereign debt of about €250m and cut about 500 jobs, mainly outside its home market. Shares closed down 3.98 per cent at 24.72p.

Meanwhile UBS said gains on credit derivatives would help it record a modest third-quarter net profit and said there had not been a mass pulling of funds since the discovery of Kweku Adoboli’s alleged $2.3bn fraudā€ˆand the resignation of chief exec Oswald Gruebel.

It came as UniCredit chief executive Federico Ghizzoni said the bank, Italy’s largest by assets, has its funding needs covered.