FRANKFURT, Germany (AP) -- Lower investment banking revenues amid Europe’s debt crisis and a one-time writeoff pushed Deutsche Bank’s net profit down by a third to 1.4 billion euros ($1.85 billion) in the first quarter.
The net profit figure compared to 2.1 billion euros in the same quarter a year ago. Analysts surveyed by FactSet expected 1.66 billion euros.
The company said revenues at the corporate and investment bank division, a key pillar of earnings, fell by 8 percent to 6.2 billion euros ($8.19 billion) in what it called “a far less favorable environment compared to the prior year quarter.”
The division recovered somewhat from the turbulence that hit European markets in the second half of last year but that didn‘t match the year-ago quarter. European markets were roiled by fears that a financially troubled large country such as Spain or Italy might default on its debts, fears that eased somewhat during the first quarter.
“This is a strong result which reflects good performance across most businesses, despite continued risk discipline and lower client activity than in the prior year,” the company said in a statement.
The bank also took a 257 million euros ($339.39 million) writedown as it exited a loan to pharmaceutical company Actavis, which is being bought by Watson Pharmaceuticals, and took 210 million euros charge for litigation expenses. Ending the bank‘s exposure to Actavis would result in a boost to its capital cushion against losses, it said.
The figures were the last quarterly earnings reported by CEO Josef Ackermann before he hands the bank over to incoming co-CEOs Anshu Jain and Juergen Fitschen at a May 26 shareholders’ meeting. Ackermann said in a statement that “against a background of continuing caution in global financial markets we delivered solid results.”
