Deutsche strikes downbeat note as trading slides

Deutsche Bank dodged a loss in the third quarter of the year thanks to new accounting rules but unveiled heavy losses in proprietary…

Deutsche Bank dodged a loss in the third quarter of the year thanks to new accounting rules but unveiled heavy losses in proprietary trading as global financial markets remained rocky.

The head of Germany's flagship bank, once seen as having escaped the worst of the markets meltdown, had declared the financial crisis as over for his bank one year ago.

Josef Ackermann's comments on Thursday, however, marked a departure from the optimism that has seen him predicting light at the end of the tunnel several times over.

"Conditions in equity and credit markets remain extremely difficult," he said, warning the bank could cut its dividend to shore up capital in a "highly uncertain environment."

His comments came as Germany's finance minister said that a number of the country's banks were expected to turn to Berlin for help in the markets storm.

Peer Steinbrueck appeared to make a veiled reference to Deutsche Bank when he told a newspaper that those seeking help could include banks who were publicly opposed to taking it in the past. Ackermann recently was quoted as saying he would be "ashamed" to take taxpayer money.

Deutsche made a pretax profit of €93 million ($118.5 million) in the third quarter of the year, a result only possible thanks to changed accounting rules. These allowed it to cut writedowns by more than €800 million to €1.2 billion during the period.

The new rules, sanctioned by Brussels lawmakers, soften the old system that demanded all assets reflect market prices.

Deutsche Bank is, for example, sitting on more than €22 billion of leveraged loans - commitments often made to private equity investors to lend money to buy companies.

Farming out these loans had become difficult as worried investors retreated to safe havens and their value had fallen. The new accounting rules now allow Deutsche to hold some of these loans on their books at a fixed price.