Tax credits boost profit at Deutsche

DEUTSCHE Bank yesterday said it expects third-quarter profit to triple after a boost from tax credits, though analysts said the market had been anticipating an even better performance from the bank.<br /><br />Germany&rsquo;s biggest bank said pre-tax profit for the three months to September would be in the range of &euro;1.3bn (&pound;1.17bn), with net profit coming in at around &euro;1.4bn after the conclusion of a number of tax audits.<br /><br />The firm said its core tier one capital ratio, a key indicator of its regulatory cash reserves, would be around 11.7 per cent at the end of the quarter, up from 11 per cent in June.<br /><br />But analysts said the figures were languishing somewhat behind the stellar results posted by the bank&rsquo;s large US rivals in recent days.<br /><br />&ldquo;I suspect that the market had secretly anticipated even better figures,&rdquo; said Hamburger Sparkasse analyst Christian Hamann.<br /><br />Equinet analyst Philipp Haessler added that the results &ndash; which smashed previous pre-tax profit forecasts of just under &euro;1.2bn &ndash; were positive. But he added: &ldquo;We continue to see high risks for a capital increase and declining earnings in the coming quarters due to a normalisation of the capital market environment.&rdquo;<br /><br />Deutsche, which avoided tapping the German government for aid over the course of the crisis, said it expected all business segments would report positive results when it releases a full earnings report next Thursday.<br /><br /><strong>HOW DO DEUTSCHE BANK&rsquo;S AND MORGAN STANLEY&rsquo;S RESULTS COMPARE TO THEIR RIVALS?</strong><br />Deutsche Bank and Morgan Stanley are just the latest in a string of top banking players to report impressive sets of results for the third quarter of the year.<br /><br />Continued strength in fixed income last week drove US giant Goldman Sachs to quadruple its third-quarter earnings to $3.2bn (&pound;1.93bn) despite a lacklustre performance in the group&rsquo;s investment banking division.<br /><br />Group income of $3.19bn was more than three times the $845m earned over the same period last year, while revenue in fixed income, currency and commodity trading (FICC) ballooned to $5.99bn, 274 per cent above the $1.6bn the division posted last year.<br /><br />JP Morgan Chase&rsquo;s bumper $3.6bn quarterly profit was also a tough act to follow as its investment bank capitalised on the disappearance of some rivals and the weakness of others, offsetting rising losses on credit cards and other consumer loans.<br /><br />Only Citigroup, which inched to an unexpected third quarter profit of $101m on the back of $20.39bn in revenues, has failed to impress. <br /><br />Analysts pointed out that, but for stock dividends and one-off items, the bank would have recorded a $3.2bn loss.<br /><br />Chief executive Vikram Pandit said the firm was still being weighed down by loan losses from troubled US consumers.