Deutsche Bank Records Net Profit with Write-downs

Deutsche Bank, Frankfurt, Germany, saw 1.2 billion euros ($1.5 billion) of partially mortgage-related writedowns in the third quarter but was able to record a net profit under recent European Union-endorsed accounting changes. The writedowns reflected exposure to residential mortgage-backed securities, commercial real estate and monoline insurers, among other things. The accounting changes allowed reclassification of certain assets "for which no active market existed in the third quarter and which management intends to hold for the foreseeable future," Deutsche Bank said. As a result of these changes, the company earned net income of 414 million euros ($532 million), down from 1.4 billion euros ($1.8 billion) during the same period last year. "If these reclassifications had not been made, the income statement for the quarter would have included negative fair value movements relating to the reclassified assets" of 845 million euros ($1.1 billion), the company said.