And finally there was no more running or denying as Deutsche Bank AG at its appointed moment announced its first quarterly loss of 131 million euros ($487.7 million) in twenty consecutive such periods. The losses came under the weight of write downs in the value of mortgage – backed securities and loans for leveraged buyouts by 2.7 billion euros ($4.2 billion).
The bank which in the past had stubbornly even pridefully refused to admit to subprime vulnerably and loathed to do highlighted the losses.
The company wrote down the value of leveraged loans and loan commitments by 1.8 billion euros ($2.8) and of securities backed by residential and commercial mortgages by 885 million euros ($1.3 billion) in the first quarter. The writedowns are net figures after hedges and fees.
And so it goes that the nasty little export from the US continue to rock the biggest banks on the globe, now long after the initial subprime bubble has burst. Deutsche Bank had famously avoided the worst of the subprime contagion, because of early bets against U.S. housing, which crushed rivals Credit Suisse Group and UBS. But it’s the shock wave of the after burst which now wreaks havoc with the bank.
“The issue is not the writedowns,” said Dieter Ewald, a fund manager with Frankfurt Trust, which owns shares in Deutsche Bank. “What is worrying for me is the impact on the operating business — that’s decisive.
“Deutsche Bank is dependent on the markets. Are they in a strong position here? I would put a question mark over this.”
Respectfully Mr. Ewald we do not put a question mark over it. The markets are weak and getting weaker. Any company depending on the markets will be getting weaker along with them.
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