Deutsche Bank Q1 pretax profit tumbles as trading weighs

However, the drop not as significant as analysts had expected

Deutsche Bank's pretax profit fell by nearly a third in the first quarter to 1.68 billion euros ($2.33 billion) as an industry-wide slump in bond trading revenue depressed results, but the drag on earnings was not as bad as that seen by some of its rivals.

The pretax contribution from the investment banking division fell by more than a fifth, dragged down by a 10% fall in trading revenue, the bank said in a statement. The division includes Deutsche Bank's main trading unit, whose biggest business is fixed income.

The earnings tumble signals a weak start to 2014 in what is traditionally a strong quarter. However, the drop was not as significant as analysts had expected.

Revenue declines in trading, especially in bonds, have dogged investment banking results at peers such Barclays, JPMorgan and Citigroup.

The bank, Germany's largest, said it expected to suffer a hit of 1.5 to 2.0 billion euros due to new EU regulations expected to come into force this year that impose prudent valuation rules on assets.

That effect plus weaker results may complicate the bank's plans to fortify its capital base through retained profit in a year when tougher regulations and supervisory demands are expected to prove costly.

Still, Deutsche repeated its profitability targets for 2015, which call for a post-tax return on equity (ROE) of over 12% for the group. The bank posted an ROE of 7.9% for the quarter.Deutsche Bank had been expected to post quarterly pretax profit of 1.4 billion euros ($1.9 billion), around 1 billion less than a year earlier, according to the average result of a Reuters poll.

Net profit totalled 1.1 billion euros, down 34%, also better than analysts had expected.($1 = 0.7223 Euros)