Deutsche Bank yesterday said sales and trading activity during July and August was weaker than a year ago, providing a warning shot that third-quarter investment banking earnings could be weak across the board.
In a trading update provided as part of the prospectus for Deutsche Bank’s planned €10.2bn (£8.6bn) capital increase, Germany’s flagship lender said it expects to post a loss during the third quarter thanks to a one-off charge and weaker trading.
The main reason for the loss is a €2.3bn revaluation charge for the bank’s stake in Deutsche Postbank, but news of weak trading over the summer months sent jitters across the sector.
Deutsche Bank shares closed down 4.5 per cent, helping send the Stoxx Europe 600 banking index down 0.8 per cent lower as Deutsche Bank’s rivals UBS, Credit Suisse and HSBC closed down one per cent or more.
Deutsche Bank said sales and trading revenues at its corporate banking and securities (CB&S) businesses suffered seasonal reductions in July and August that were “more marked than in the comparable third quarter of 2009”.
In the third quarter of 2009 Deutsche Bank had posted a pre-tax profit of €1.4bn.