Deutsche Bank, Germany's largest bank, today said it expected to incur a massive loss of nearly euro 5 billion in the fourth quarter after market conditions "severely impacted" its sales and trading operations.
The loss of euro 4.8 billion ($6.37 billion) over the final three months would result in an annual loss of around euro 3.9 billion, wiping out profits made earlier in 2008.
Its shares plunged by 8.22 per cent to euro 22.27 in midday Frankfurt trading, while the DAX index of leading shares was off by 1.45 per cent overall.
"For the full year 2008, the bank currently anticipates a loss after tax in the region of euro 3.9 billion," the statement said.
The result "reflects exceptional market conditions, which severely impacted results in the sales and trading businesses", especially its credit trading and proprietary trading operations, Deutsche Bank said in reference to trading in the bank's own investments.
Measures taken to reduce the bank's exposure to risk and reorganise its operations also contributed to the loss, it added.
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Provisions taken by Deutsche Bank against potential losses on loans to bond insurers and other measures reduced its exposure to risky loans and loan commitments from euro 11.9 billion at the end of the third quarter to below euro one billion three months later, it said.
The bank also reduced its commercial real estate loans "from euro 8.4 billion to under euro 3.0 billion in the same period", it said.
Final results for 2008 are to be released on February 5.