Deutsche Bank AG, Germany’s largest bank, reported second-quarter profit that missed analysts’ estimates a day after naming co-chief executive officers to succeed Josef Ackermann next year.

Net income rose 3.3 percent to 1.2 billion euros ($1.74 billion), the Frankfurt-based bank said on Tuesday. Earnings fell short of the 1.3 billion-euro average estimate of 12 analysts surveyed by Bloomberg as the company wrote down the value of Greek debt holdings and paid a German bank levy.
Deutsche Bank said on Monday that investment-banking chief Anshu Jain and management board member Juergen Fitschen will become co-CEOs next year, while Ackermann may ascend to the role of supervisory board chairman. The bank confirmed a goal on Tuesday of 10 billion euros in operating pretax profit this year, while saying the European sovereign debt crisis will make it more difficult to reach a target at its investment bank.
“Business conditions became more challenging,” Ackermann, 63, said in a letter to shareholders published on the company’s website. “We saw increased volatility in the world’s financial markets as well as a retreat from riskier assets, including the sovereign debt of some euro-zone states.”
A target of 6.4 billion euros in profit from the corporate banking and securities unit “may now be difficult to achieve and is dependent on a swift and sustained resolution of the European sovereign debt crisis as well as a significantly improved operating environment in the second half,” Ackermann said.
Deutsche Bank has fallen 2.3 percent in Frankfurt trading this year, valuing the company at 35.5 billion euros. That’s less than the 10 percent decrease for the Stoxx 600 Banks Index.
Pretax profit jumped 17 percent to 1.78 billion euros, helped by gains at the company’s consumer banking and asset management units. Earnings before tax included a 155 million- euro writedown related to Greek government bonds, according to the statement.
Deutsche Bank had net sovereign risks related to Portugal, Italy, Ireland, Greece and Spain of 3.67 billion euros as of June 30, a decline of 70 percent from the 12.1 billion euros at the end of 2010, the bank said.
Non-interest expenses rose 17 percent to 6.3 billion euros. Of that, 712 million euros can be attributed to the consolidation of the bank’s acquisition of consumer lender Deutsche Postbank AG and 62 million euros to a first time accrual for a German bank levy, Deutsche Bank said.
(Source: Bloomberg)