Deutsche Bank reports $6.3 bn loss

Deutsche Bank AG, Germany’s biggest bank, reported a record loss of about ¤4.8 billion($6.3 billion) in the fourth quarter after the worst financial crisis since the Great Depression pummeled debt and equity trading.

The bank fell as much as 13 per cent in Frankfurt trading. The loss, which compares with a profit of about ¤1 billion a year earlier, also reflects provisions for debt backed by bond insurers and “substantial injections” of cash into money market funds, the Frankfurt-based bank said today.

Deutsche Bank has “scaled back or exited trading strategies most affected by market turbulence,” Chief Executive Officer Josef Ackermann said in a statement. The German bank lost about $1 billion from bad bets involving bonds hedged by credit-default swaps in the quarter, plus $500 million trading equities, two people with knowledge of the matter said this week. The company reported its first annual loss in more than 50 years.

“The enormous fourth-quarter and full-year loss is a shock to investors,” Michael Seufert, an analyst at NordLB in Hanover with a “sell” rating on Deutsche Bank, wrote in a note to clients today. “The process of reducing risks and scaling down the balance sheet is proving to be very painful.”

Deutsche Bank fell ¤2.01, or 8.3 per cent, to ¤22.26 by 1:46 pm in Frankfurt. The stock is down 20 per cent so far in 2009.