Deutsche Bank losses hit £4.5bn amid writedowns and litigation charges
Deutsche Bank has warned it will post a loss of 6.2 billion euros (£4.5 billion) in the third quarter of its financial year due to a series of writedowns and litigation charges.
Germany's largest bank shocked investors when it said in a statement on Wednesday night that it would book charges of 5.8 million euros (£4.3 billion) on the value of businesses it had bought.
It also said it was setting aside £1.2 billion in legal costs.
The bank has been caught up in the Libor-rigging scandal and is being investigated by Swiss authorities for suspected price-fixing on the precious metals market.
Analysts had expected the bank to make a net profit of around 1 billion euros (737 million) in the third quarter.
Spreadex market analyst Connor Campbell called the losses "genuinely astounding".
In London, shares in Barclays, HSBC and Royal Bank of Scotland were all lower with investors concerned over the value of the assets the banks hold.
Deutsche Bank said it had written down the value of its previous acquisitions, primarily US lender Bankers Trust and German retail operation Postbank.
It also wrote down the value of its 20% stake in Chinese lender Hua Xia Bank by 600 million euros (£442 million) which it plans to sell as it is no longer considered a strategic holding.
The writedowns are not expected to affect Deutsche's capital ratio, which is forecast to be around 11% for the third quarter measured by new European bank rules.
New chief executive John Cryan, who took over in July from co-chief executives Anshu Jain and Jurgen Fitschen, is trying to shrink the bank's global ambitions.
In an open letter to staff Mr Cryan said: "The news is not good, and I expect a number of you will be very disappointed by it."
Mr Cryan is reportedly planning to cut about 23,000 jobs - about a quarter of the workforce - in a bid to reduce costs.