Deutsche Bank has downgraded its pre-tax
income target for its asset and wealth management (A&WM)
business as part of bank’s group-wide profit warning.

The bank’s asset and wealth division targeted
pre-tax income of €1bn ($1.3bn) for 2011, but achieved only €0.4bn
for the first six months of the year.

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A Deutsche spokesman told PBI it did
not have a separately set target for its private wealth management
(PWM).

 

Mixed Q2 results for private wealth
arm

Earlier this year, pre-tax income at
Deutsche’s PWM business fell to €102m in the second quarter ending
30 June, representing an 12% quarter-on-quarter decline from €116m
as at 31 March.

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Net new money at PWM stood at €5bn as at 30
June, growing from €3bn in the first quarter.

Meanwhile, the A&WM business as a whole
reported a €227m pre-tax income for the same period ending 30 June,
compared to €190m for the first quarter – the result of
“disciplined” cost control and increased revenues from “positive
asset mix shift”.

 

Pre-tax drop part of wider
woes

The A&WM results warning come as Deutsche
group said its €10bn group pre-tax income target for 2011 was no
longer within reach.

The poor results were mainly driven by its
corporate banking and securities (CB&S) division which achieved
€3.3bn in the first half, representing a “significant below” target
result.

Deutsche Bank said that European sovereign
debt crisis led to “significantly” reduced volumes and revenues in
the CB&S division. The bank also said that the third quarter
has been “negatively impacted” by operating costs relating to an
indirect tax position.

Deutsche will release its third quarter
results on 25 October.