German exports dive; Deutsche Bank warns on profit

The bank said it expects a third-quarter loss of 6.2 billion euros ($6.96 billion).

According to Deutsche Bank, the impairment of goodwill and intangibles as well as its Hua Xua investment has no material impact on its regulatory capital ratios.

Mr Cryan is reportedly planning to cut about 23,000 jobs – about a quarter of the workforce – in a bid to reduce costs.

In an open letter to staff Mr Cryan said: “The news is not good, and I expect a number of you will be very disappointed by it”. Markets were relieved that the measures would not affect the bank’s capital ratio.

Other traders and analysts said Deutsche Bank’s plans to take large writedowns at its investment banking unit made sense as a “kitchen-sink” exercise, covering all contingencies.

In a report released earlier this week, Moody’s listed Credit Suisse and Deutsche Bank among three others as European investment banking mainstays weighed down by legacy assets – capital-intensive assets and risky exposures that are a holdover from headier days.

It was also taking a $673 million write down in its stake of a Chinese bank, Hua Xia in which it has a near 20-per cent stake.

Deutsche Bank, the German bank that has a big presence on Wall Street and is facing much regulatory scrutiny in the United States, has warned that it expects to post a hefty loss in the third quarter. JPMorgan Chase & Co. set a €35.00 ($39.33) price target on Deutsche Bank AG and gave the company a buy rating in a report on Monday, September 28th. Mr. Peace this month upgraded his rating of Deutsche Bank shares to buy from hold, citing increased confidence in cost-cutting plans.

The shares of the ADR were down 2% to $28.21 at around 1 p.m. ET Thursday. The Frankfurt-based lender also is adding about €1.2 billion euros to its litigation reserves. Deutsche Bank’s 12-month consensus target price is $34.16.

Deutsche Bank AG co-Chief Executive Officer John Cryan may eliminate a dividend that’s stood since Germany’s postwar reconstruction as he tries to overhaul the firm without asking shareholders for more capital.

Goldman Sachs analysts met the news as a sobering reminder of Deutsche Bank’s uphill battle.

The warning stems from at least two charges and a company decision to put aside cash to fight potential legal battles.

Higher capital requirements for its investment bank were partly responsible for the huge impairment charges of €5.8bn. Final litigation provisions inthe quarter may be affected by further events before we finalize and reportthird quarter results.