Germany's biggest bank reported a strong rise in overall profits for 2011, but business cooled markedly in the fourth quarter. The end of year dip has tarnished the record of outgoing Deutsche Bank chief Ackermann.
Net profit jumped by 87 percent last year to a total of 4.3 billion euros ($5.5 billion), and revenues rose by 16 percent to 33.2 billion euros ($43.7 billion), Deutsche Bank reported Thursday.
However, the bank's good overall results were marred by an unexpectedly weak fourth quarter, in which earnings dwindled to 186 million euros - down 76 percent from the preceding three months and a drop of 69 percent compared with the same period in 2010. Excluding tax benefits in the fourth quarter, the bank actually lost 351 million euros.
" We were faced with extremely adverse external circumstances in the second half of 2011," Deutsche Bank CEO Josef Ackermann told a news conference in Frankfurt.
Investment banking slows down
While Deutsche Bank's classic high-street banking business rose by 22 percent, income from trading bonds and other debt securities fell 35 percent, and trading in equities brought in 38 percent less revenue compared with the fourth quarter of 2010.
Deutsche Bank chief Josef Ackermann said the eurozone debt crisis had made investors "shy away from riskier investments", and led to a "decline in volumes across many products."
Analysts had predicted a fourth-quarter net profit of 572 million euros, according to a poll carried out by Dow Jones Newswires.
"A loss of about 500 million euros in investment banking activities is a pretty bad result," Konrad Becker, analyst at Merck Fink, told Reuters news agency. Becker also said that he didn't expect the bank's results in this sector to return to the "brighter figures" achieved in early 2011.
CEO leaves on sour note
The results are a downbeat farewell note for CEO Josef Ackermann, who presided over his last annual press conference Thursday before leaving his post in May. The Swiss-born Deutsche Bank chief originally wanted to hike profits to 10 billion euros in 2011.
Ackermann, however, highlighted the rise in the bank's full-year profit, saying that, unlike other banks in Europe, Deutsche Bank continued to have "unrestricted access to the funding it needs."
"We significantly strengthened our capital base, boosted our liquidity reserves and reinforced our funding position," Ackermann said. He also announced that Deutsche Bank would pay a dividend of 0.75 euros per share for 2011, unchanged from the 2010 payout.
After a shareholder meeting in May, Ackermann is scheduled to join the bank's supervisory board, making way to Ashu Jain and Jürgen Fitschen as the bank's new management team.
uh/nk (AP, Reuters, dpa)