Deutsche Bank Drops on Loan Losses

Mayank Mehta
28 Jul, 2009
New York City

European markets closed lower after rallying for more two weeks. Deutsche Bank set aside sharply higher loan loss reserves. Pfeiffer Vacuum second quarter revenues exceeded expectations. EADS report higher quarterly profit as Airbus deliveries increase. BP issues cautious outlook.

[R]6:00 PM Frankfurt, Paris; 2:00 PM New York – European markets closed lower after rallying for more two weeks. Deutsche Bank set aside sharply higher loan loss reserves. Pfeiffer Vacuum second quarter revenues exceeded expectations. EADS report higher quarterly profit as Airbus deliveries increase. BP issues cautious outlook.[/R]

European markets declined after Deutsche Bank increased provisions for loan losses. The bank reported higher revenues from trading in bonds and stocks but market focused on the loan loss provisions.

Paris CAC 40 Index decreased 41.39 or 1.23% to close at 3,330.97 and in Frankfurt DAX index lower 76.81 or 1.46% to close at 5,174.74.

Gainers & Losers

Deutsche Bank AG dropped 11.4% to 46.09 euros after second quarter revenues rose 46% to €7.9 billion from €5.4 billion a year ago. Net income in the quarter rose 67% to €1.1 billion or €1.64 per diluted compared net income of €645 million or €1.27 per share a year ago.

The bank also increased provision for loan losses to 1 billion euros from 135 million euros a year ago.

Deutsche Bank AG, in the last one year traded as high as €63.80 in August 2008 and as low as €16.88 in January 2009. Based on the yesterday’s closing price of €46.16 the company has market cap of €28.58 billion.

Grenkeleasing AG decreased 3.9% to 24.85 euros after the leasing company said first-half net interest income fell 6.8% to €22.0 million from €23.6 million a year ago. Net profit for the first-half fell 19.6% to €13.1 milion compared to net profit of €16.3 million a year ago.

Grenkeleasing AG, in the last one year traded as high as €27.74 in June 2009 and as low as €17.60 in December 2008. Based on the yesterday’s closing price of €25.00 the company has market cap of €342.10 million.

EADS NV increased 2.3% to 13.01 euros after the defense contractor said first-half revenues rose 2% to €20.2 billion from €19.7 billion a year ago. Net profit in the first-half fell 6.2% to €378 million or €0.47 per diluted share compared to net profit of €403 million or €0.50 per share a year ago.

EADS NV, in the last one year traded as high as €16.54 in September 2008 and as low as €8.47 in March 2009. Based on the yesterday’s closing price of €13.12 the company has market cap of €10.63 billion.

LVMH Moet Hennessy Louis Vuitton SA decreased 0.3% to 61.11 euros the luxury goods company said first-half revenues rose 0.2% to €7.81 billion from €7.80 billion a year ago. Net profit in the first-half fell 23% to €687 million compared to net profit of €891 million a year ago.

LVMH Moet Hennessy Louis Vuitton SA., in the last one year traded as high as €75.51 in September 2008 and as low as €39.19 in November 2008. Based on the yesterday’s closing price of €61.86 the company has market cap of €29.24 billion.

Ubisoft Entertainment SA plunged 14.9% to 12.43 euros after the largest maker of video games said first quarter sales fell 51% to €83 million from €169 million a year ago. Sales for the second quarter of 2009-10 are expected to come in at around €80 million, representing a 54% decrease on the second quarter of 2008-09. For full-year sales are now expected to come in at approximately €1.040 billion.

Ubisoft Entertainment SA, in the last one year traded as high as €33.46 in August 2008 and as low as €11.07 in January 2009. Based on the yesterday’s closing price of €11.99 the company has market cap of €1.11 billion.

Europe Markets Review

In London FTSE 100 Index closed lower 57.29 or 1.25% to 4,528.84, in Paris CAC 40 Index decreased 41.39 or 1.23% to close at 3,330.97 and in Frankfurt DAX index lower 76.81 or 1.46% to close at 5,174.74. In Zurich trading SMI decreased 12.09 or 0.21% to close at 5,762.80.

DAX Index Movers

Deutsche Bank AG led the decliners in the DAX index of 10.65% followed by losses in K+S AG of 4.35%, in Salzgitter AG of 4.11%, in ThyssenKrupp AG of 3.13%, in Deutsche Boerse AG of 2.78%.

Merck KGaA led gainers in the DAX index with a rise of 2.04% followed by increase in CommerrzBank AG of 1.30% in Volkswagen AG of 1.14%, in Deutsche Telekom AG of 1.06%, in Linde AG of 0.38%.

CAC-40 Index Movers

BNP Paribas SA led the decliners in the CAC-40 index of 5.07% followed by losses in Vallourec SA of 4.37%, in ArcelorMittal of 4.34%, in Bouygues SA of 3.12%, in Compagnie de Saint-Gobain SA of 2.99%.

Lagardere SCA gainers in the CAC-40 index with a rise of 5.34% followed by gains in EADS NV of 2.32%, in Sanofi-Aventis of 1.93%, in Electricite de Strasbourg SA of 1.62%, in ING Prime Rate Trust of 1.56%.