Deutsche Postbank sees big 2008 loss
Deutsche Postbank expects to report a big 2008 loss after it eliminated its stocks portfolio at the end of last year.
Deutsche Postbank expects to report a big 2008 loss after it eliminated its stocks portfolio at the end of last year, triggering large hidden losses.
Postbank, in which Germany’s biggest lender Deutsche Bank is taking an initial stake of just under 30 percent, said the “very negative” capital markets in the fourth quarter and ratings reviews of its structured finance investments could also have a big impact on earnings.
“Postbank thus expects a significant negative result for full-year 2008,” it said in a statement.
Financial market experts estimated the writedowns could take Posbank’s full-year loss to nearly 1 bn euros (USD 1.4 bn). Deutsche Postbank declined comment on the figure.
Despite the hit to earnings, the complete elimination of equity holdings removed a major risk to Postbank’s core capital, the lender said.
“To attain the intended reduction in risk, this significant one-time impact on profit was willingly accepted,” it said.
UniCredit analyst Andreas Weese calculated that the writedowns on the equity portfolio might be of a magnitude of 500m euros, while those on the structured credit portfolio would be about 300m to 400m.
Postbank owner Deutsche Post said it still expected the sale of the stake to Deutsche Bank to be completed early this year as planned. Deutsche Bank said this as well.
Deutsche Post said it was sticking to its 2008 target to generate 2.4 billion euros in earnings before interest and taxes before one-off effects, adding it would comment on net profit in light of developments at Postbank at the appropriate time.
