Deutsche Bank (DB) reported a 63% fall in pretax profits at its corporate banking and securities unit in the three months to the end of June, leaving analysts puzzled and disappointed by the division’s worst second-quarter since it posted a loss in 2008.
While Deutsche Bank fared better than Swiss rival UBS (UBS), whose investment bank today posted a quarterly loss, the German bank’s second-quarter pretax profits from corporate banking and securities fell to EUR357 million from EUR969 million a year early. The decline compared with the first three months of this year was even more pronounced, as profits dived 79% from EUR1.7 billion.
Deutsche Bank attributed the results primarily to a drop in fixed-income sales and trading revenues “due to deliberately lower levels of risk incurred to correspond with subdued trading flow volumes” and lower equity origination revenues compared with the second quarter last year, when there was “strong IPO activity.”
Source: Wall Street Journal