Streamlining costs dent Deutsche Bank in Q3

FRANKFURT, Germany (AP) ? Deutsche Bank saw profits slip 3 percent in the third quarter from a year ago, as higher costs for streamlining its business and from credit writeoffs offset better revenues from investment banking and trading stocks and bonds.

The bank said Tuesday that its net profit fell to ?755 million ($974 million) from ?777 million in the same quarter a year ago even though revenues rose 18 percent to ?8.7 billion.

Revenues were up at its investment banking operation due to improving market conditions and increasing activity by clients. Financial markets have bounced back in Europe during the quarter due to steps taken by the European Central Bank. The ECB has unveiled a new bond-buying plan that is designed to keep a lid on the borrowing costs of countries like Spain and Italy and that's helped shore up confidence in the financial system.

The investment banking division did particularly well during the quarter ? its revenues surged 65 percent to ?4.3 billion as income rose from trading stocks and bonds, and as more clients sought fee-producing advisory services.

However, several factors offset the better results from investment banking.

The bank booked ?276 million in losses from its cost-reduction program, and ?289 million from lawsuits it is facing. It also saw a 20 percent increase in writeoffs for bad loans and investments of ?555 million. It said the increase was related to how the bank applied accounting rules that determine when companies must account for the fallen value of investments.

"In the third quarter, we delivered a strong operating result which was supported by an improvement in market conditions," co-CEOs Anshu Jain and Juerge Fistchen said. "In the near term, the macro environment remains uncertain, and we will maintain a cautious and risk-focused approach."

Jain and Fitschen, who took over from Josef Ackermann earlier this year, are trying to cut costs and shed risky loans and investments. Big banks are facing a tougher regulatory environment as the European Union and international agreements push them to reduce the relative size of risky investments.

Source: http://news.yahoo.com/streamlining-costs-dent-deutsche-bank-q3-080742057--finance.html

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