Net profit of Deutsche Bank, the largest banking group listed on European stock markets, has almost halved in the second quarter of 2012 because of difficult conditions on capital markets, according to AFP and Reuters. In April-June 2012, Deutsche Bank recorded a net profit of €661 million, down 46% compared to €1.2 billion in the second quarter of 2011. Net income decreased by 6% to €8 billion in April-June 2012.
“Bank’s second quarter performance was affected by a volatile environment. Sovereign debt crisis in Europe continue to affect investor confidence and business customers of the bank”, stressed Deutsche Bank co-CEOs, Anshu Jain and Juergen Fitschen. Investment banking division of Deutsche Bank showed in the second quarter a decrease in profit before tax of 63%.
Recently, German media reported that Deutsche Bank plans to layoff 1,000 employees at the investment banking division. Representatives of the German bank did not comment on information, while in April announced that there will be no redundancies in the investment division. At the end of the first quarter, the corporate and investment division of Deutsche Bank had 14,600 employees. Deutsche Bank co-CEOs, Anshu Jain and Juergen Fitschen announced just a short time ago that they consider additional measures to reduce costs. “We need to talk again about growth but also about measures to improve efficiency, after all requirements imposed by regulators on capital,” said Anshu Jain, without giving details on the effect of these measures on jobs at Deutsche Bank.
Bank assets rose last year 14% to €2,160 billion,as Deutsche Bank is becoming the largest banking group listed on exchanges in Europe, for the first time in the last five years, according to Bloomberg data. Under former CEO Josef Ackermann, who considered “reckless” proposals for limiting the size of the bank, Deutsche Bank increased its assets by 20% since 2006. German bank is the second in Europe for indebtedness and the third least capitalized of the largest European banks, even though Ackermann increased reserves and reduced dependence on borrowed money.
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