Deutsche Bank, Germany's biggest bank, was cautiously optimistic yesterday about the prospects for a rebound in financial markets in the second half of the year.
But the bank reiterated concerns about potential bad debts and signalled funds to cover credit risk would continue to rise. Last year the bank more than doubled its loan loss provisions from €478m (£294m) to €1.02bn. In common with most investment banks, Deutsche's provisions against bad debts rose sharply in the wake of the collapse of Enron and the economic crisis in Argentina.
Analysts also believe the bank took a $200m (£140m) hit from the placing of Vivendi Universal shares, which hit Goldman Sach's first-quarter earnings announced last week.
Deutsche's net profits slumped 67 per cent in the 12 months to 31 December 2001 to €1.4bn, which was in line with guidance given by the bank in January. The shares closed up 0.5 per cent at €73.25.
Rolf Breuer, Deutsche's outgoing chairman, said: "2002 promises to be another difficult year but we are preparing for the upswing."
Mr Breuer will be succeeded in May by Josef Ackermann, the head of the bank's investment banking arm in London. Mr Ackermann is expected to push through more cost cutting.Reuse content