Deutsche's asset management profit falls 17%
Deutsche Bank blamed market conditions for a 17% decrease in the pre-tax profit of its asset and wealth management division in the second quarter of this year.
The division registered pre-tax profit of €242m ($378m) in the three months to the end of June, down from €292m in the second quarter of 2007.
The division reported net revenues, comprising performance and management fees, of €962m in the second quarter of 2008. This was a decrease of €177m, or 16%, compared with the same period in 2007. Investment losses in many of its funds reduced the division's performance fee income.
In a statement, the company said: "The declines were mainly driven by the impact of unfavourable market conditions in the second quarter 2008 on asset-based fees as well as the impact of the strong Euro. These developments were only partly compensated by the effects of continued invested asset inflows."
Assets under management, which drive its management fee income, recorded a slight increase from €698bn to €700bn. The bank raised €8bn of new money from clients, but the overall increase was dampened by investment losses.
Assets under management were split €211bn from retail clients, €184bn private wealth clients, €155bn from institutional clients, €99bn of insurance assets and €52bn in alternatives. Geographically, €297bn is from German investors and more than €239bn is from the Americas.
The investment losses simultaneously reduced expenses, since part of the employee compensation is related to investment performance. Non-interest expenses fell 15% from €845m to €720m.
-- Write to William Hutchings at whutchings@efinancialnews.com
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