Deutsche Bank Declines as Pretax Profit Misses Some Estimates
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By Aaron Kirchfeld
Oct. 21 (Bloomberg) -- Deutsche Bank AG, Germany’s biggest bank, fell the most in more than two months in Frankfurt trading after third-quarter pretax profit missed some analyst estimates.
Pretax profit was 1.3 billion euros ($1.94 billion), the Frankfurt-based company said in a statement today. That was less than the 1.53 billion euros forecast by Matthew Clark, a London- based analyst at Keefe Bruyette & Woods Ltd. The number matched forecasts from Morgan Stanley and Bernstein Research while the median estimate of 10 analysts was 1.19 billion euros.
JPMorgan Chase & Co. last week reported its highest profit since the subprime mortgage market collapsed while earnings at Goldman Sachs Group Inc. surged. That raised expectations for Deutsche Bank, which sidestepped the worst of the financial crisis without government aid, analysts said.
“The headline pretax figure wasn’t a blow out,” said Clark, who has an “outperform” rating on the stock. “We need to wait before we can judge the quality.”
Deutsche Bank fell as much as 5 percent and was down 4.3 percent to 52.98 euros as of 11:58 a.m. in Frankfurt trading. The stock has gained 91 percent this year, valuing the company at 33 billion euros.
“After the good figures from Goldman and JPMorgan, analysts expected pretax profit to exceed all estimates, but they didn’t,” said Olaf Kayser, an analyst at Landesbank-Baden Wuerttemberg, who has a “hold” rating on the stock. “Some people on the market are speculating that Deutsche Bank came out with the figures early to prepare for a capital increase.”
Capital Ratio
The bank’s Tier 1 capital ratio, a measure of financial strength, rose to 11.7 percent in the quarter from 11 percent at the end of the second quarter.
Preliminary net income more than tripled, boosted by tax credits and the resolution of tax audits related to prior years, the bank said. Profit rose to 1.4 billion euros from 435 million euros a year earlier. That beat the 811 million-euro median estimate of 12 analysts surveyed by Bloomberg News. All business segments will report positive results, the lender said.
To contact the reporters on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net
Last Updated: October 21, 2009 06:16 EDT
