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Hit of £665m sidestepped by Deutsche
31.10.08
Deutsche Bank has avoided a £665 million writedown by using controversial new accounting methods.
The German giant has used fair-value accounting in the past, but those rules have been relaxed to ease fallout from the banking crisis. Deutsche reclassified about €25 billion (£19.6 billion) of assets as loans it will hold until maturity, rather than sell on.
"It is perhaps the correct interpretation of the accounting rules but it is slightly questionable," an analyst said.
The shift meant Deutsche could post €1.2 billion of writedowns rather than more than €2.04 billion and book a quarterly net profit of €414 million.
