The second quarter of 2008 proved to be another very challenging quarter for the banking industry. After stabilizing in April, markets again deteriorated during June, with the result that the first half-year of 2008 turned out to be one of the most difficult for many years. In the U.S., house prices continued to decline, impacting the wider economy. Inflation in food and other essential commodities lead to growing concerns, and by the end of June the price of oil had risen 46 % since the start of the year. In the banking sector, conditions for credit and liquidity remained tight, while the banks most directly affected by the credit crisis came under pressure to replenish their capital base. Equity markets also weakened substantially toward the end of the quarter.
Deutsche Bank reported second-quarter net income of € 645 million, or € 1.27 per share (diluted) – well below the second quarter of 2007, but a marked improvement from our first quarter this year. The environment continued to affect the performance of our investment banking business, but our ‘stable’ businesses again proved their resilience. In Private Clients and Asset Management, we attracted € 10 billion of net new money, and managed invested assets of € 898 billion at the end of the quarter. We also maintained our capital strength and made significant progress on reducing key exposures. A year has now passed since the beginning of the credit downturn, and over this period, Deutsche Bank has earned a total of € 3.1 billion in net income. We have shown our strength in difficult conditions.
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“...In the first quarter of 2008, financial market conditions were the most difficult in recent memory. Conditions in credit markets, and liquidity in the financial system, were both very tight....” [more]
