Deutsche Bank writedowns swell

By John O'Donnell

FRANKFURT (Reuters) - Deutsche Bank (DBKGn.DE) announced fresh writedowns on Thursday, taking its bill from the global financial crisis beyond $11 billion (5.55 billion pounds).

Germany's flagship financier had originally been seen as one of the few to emerge unscathed from the crisis, but as the problems on global markets continue Deutsche Bank is being sucked ever deeper into trouble.

The group's pretax profit collapsed in the second quarter to 642 million euros (505 million pounds) -- a fraction of the 2.7 billion euros it made a year earlier -- as writedowns ate into its bottom line.

Deutsche listed its latest injuries from the global crisis, saying it made 1 billion euros of writedowns in residential mortgage-backed securities and a further 500 million euros linked to monoline insurers which insure against bond defaults.

Commercial real estate investments cost it 300 million.

Its bill from the turmoil, while modest compared to Swiss rival UBS (UBSN.VX), has overtaken that of its Zurich-based competitor Credit Suisse Group AG (CSGN.VX), which has made about $8 billion of writedowns.

The extra damage in the second quarter, however, had been broadly expected and Deutsche's shares were just 0.4 percent lower at 8:24 a.m. British time, in line with European rivals .SX7P.

"We remain cautious for the remainder of 2008," said Chief Executive Josef Ackermann, who also chairs top global banking group the Institute of International Finance.