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Deutsche Bank racks up quarterly loss

Banking shares in London came under pressure today after Germany's biggest lender announced a large loss for the final three months of the year.

Deutsche Bank racked up a fourth-quarter loss of 1.2 billion euros (£989 million) due to a 16% fall in revenues, as well as one-off expenses and losses on investments it is offloading.

The update had been scheduled for release on January 29 but was brought forward amid recent market jitters about its performance.

Shares in firms with investment banking arms were hit by the results, with FTSE 100 pair Barclays and Royal Bank of Scotland down by as much as 2%.

The Frankfurt-based bank's disappointing fourth quarter performance included a 31% year-on-year drop in revenues from fixed income, commodity and currency trading (FICC). It follows disappointing updates in this area from the large US investment banks in recent days.

Gary Greenwood, a banking analyst at Shore Capital stockbrokers, said he believed FICC accounted for approximately 20% and 15% of total group income at Barclays and Royal Bank of Scotland respectively last year.

He said weak FICC trading may also weigh on the operating performance of the interdealer brokers, ICAP and Tullett Prebon.

However, he added: "The shares in all of these companies have performed well in recent weeks and so we would not be surprised to see some weakness in the short-term which could create better entry points in those stocks."

Deutsche Bank said efforts to restructure its businesses affected financial results for the second successive year.

The bank lost 1.1 billion euros (£907 million) on investments it has set aside for disposal to reduce the risk it carries on its balance sheet.

The bank also took one-off hits on credit and debt valuations as well as costs for litigation in relation to past disputed activities.

Joint chief executives Juergen Fitschen and Anshu Jain said: "2013 was the second successive year in which we have invested in the bank's future growth and in further strengthening our controls while addressing legacy issues. These factors impacted our financial results.

"Nonetheless, underlying core business profitability was amongst the highest of the past decade, and we have made Deutsche Bank fitter, safer and better balanced."

They said 2014 was expected to be a year of further challenges but that they remain confident the bank will meet its targets set for 2015.

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