Deutsche Bank Takes $3.6B RMBS Writedown

Deutsche Bank AG took 2.3 billion euros ($3.6 billion) in residential mortgage-backed securities writedowns during the second quarter but generated a net profit of 645 million euros ($1 billion). Despite the profit, an analyst at Standard & Poor's lowered S&P's long-term counterparty credit ratings on the company, citing the addition of the most recent writedown to others and the company's performance relative to that of its peers. "The downgrade reflects that we no longer consider Deutsche Bank's performance to be materially stronger than that of the leading peers in the currently difficult operating environment," said S&P credit analyst Bernd Ackermann. "Although the bank's performance is still reasonably sound, its earnings for the past 12 months have been affected by 7.1 billion euros [$11.0 billion] in major markdowns, impairments, and credit-valuation adjustments."