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Deutsche Bank posts shock loss
FRANKFURT, Germany -- Deutsche Bank, Europe's biggest bank, has posted an unexpected third-quarter loss as it sets aside more money for possible bad loans. It made a pretax loss of 181 million euros ($178 million) in the three months to September 30, figures revealed on Thursday. Analysts polled by Reuters had expected a profit of 282 million euros. In the same period a year ago, it made a profit of 363 million euros. The figures underscore the vulnerability of the troubled German banking sector and the struggling domestic economy. Last week, Germany's second-largest bank, HVB Group, saw its bad loan provisions soar to 1.2 billion, pushing it into a third-quarter loss of 360 million euros. Deutsche Bank had loaned money to failed German construction company Babcock-Borsig and to WorldCom, which filed for bankruptcy protection. The bank has now set aside 753 million euros in the third quarter, versus 135 million a year ago, the company said. But Chief Executive Josef Ackermann said in a letter to shareholders the bank was set to post "satisfying" full year results as the company sold businesses and cut jobs. The bank said its drive to cut costs by two billion euros by the end of 2003 was running ahead of plan with 10,000 of more than 14,000 planned job cuts already implemented. "With only two months to go in the year, we are confident that we will be able to report a satisfying full-year 2002 result,'' said Ackermann. The bank booked a 390 million net gain in the third quarter from the merger of its mortgage bank with those of Frankfurt rivals Commerzbank and Dresdner Bank. It has already taken 2 billion euros from the sale of stakes in insurers Allianz and Munich Re and expects to sell its other businesses. Its trading income, which includes trading in stocks, fixed income, currencies and commodities, dropped 55 percent to 904 million euros as global markets remained sluggish. Deutsche's net loss for the third quarter was 299 million euros, compared to a 2.1 billion euro second quarter profit and 5 million euro loss in the third quater of 2001, the company said. Deutsche's stock, which has fallen 45 percent this year, was down 5.2 percent to 41.15 euros in early Frankfurt trading on Thursday.
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