In its Q2 results, DB revealed pre-tax profits of £1.1bn (EUR 1.3bn) for the quarter, up 105 per cent on £554m in Q2 2008.
But overall provision for credit losses due to bad loans was up to £863m, up from £116.5m last year. The bank blames the increased provisions on the weaker credit environment.
Within its investment group, DB’s provision for credit losses was £672m, up from provisions of £7.76m for Q2 2008. Within the asset management group of DB, provisions were up £190.7m up from £125m in Q2 2008.
DB chairman of the management board Dr. Josef Ackermann says: “In conditions which contained both opportunities and challenges, Deutsche Bank turned in very satisfactory results. In an uncertain environment, Deutsche Bank is well prepared.
“We have taken good advantage of improved conditions on financial markets, but we have also reduced costs and balance sheet risks, and strengthened our capital and liquidity base, all of which leaves us well-placed to confront near-term challenges.”
Standard & Poors says continued high loan loss provisions may risk the bank’s future profits.