STOCKS NEWS EUROPE-Deutsche Bank up, Q3 profit tops expectations

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09:01GMT 30Oct2008-Deutsche Bank up as Q3 profit tops expectations

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Shares in Deutsche Bank (DBKGn.DE) rise 8.2 percent, outperforming German blue chips .GDAXI, which are up 2 percent, as investors cheer surprisingly strong third-quarter net profit from Germany's largest bank and indications it will not have to raise capital in the near term.

"Third-quarter pre-tax and net income was significantly better than we and the consensus had expected, despite a higher loss in the fair value result than anticipated. The main reason was that the bank was able to reduce its writedowns by 845 million euros by using the new accounting rules," says an analyst from Merck Finck.

Andreas Weese, analyst at Unicredit, says while the net income is higher than expected, it is due to positive one-off effects and the avoidance of higher markdowns.

"We think that the strengthening of the capital ratios remains in the market focus. With a tier 1 ratio of above 10 percent, we continue to see no need for capital measures simply in order to compensate for losses or to strengthen capital ratios at the moment," Weese said.

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