Deutsche Bank takes hit in London

DEUTSCHE Bank kicked off the European banks' earnings season today with a 20% drop in third-quarter profits from its core corporate and investment banking division headquartered in London.

The decline coincides with the resignation from the bank's supervisory board of Ulrich Cartellieri. The board, headed by chief executive Josef Ackermann, admitted he left 'due to differences in opinion on the bank's strategy'.

Deutsche has been tipped as a candidate for merger with another bank to create a more global investment banking operation.

Much of the fall in profits came from a drop in income from proprietary trading and equities, 'our area of greatest strength historically', the bank reported as underlying pre-tax profits for the whole division slipped to €555m (£387m), down €140m from a year ago.

But Deutsche turned in forecast-beating group net profits of €680m, 18% more than a year ago as lower bad debt charges and cost cuts made up for a fall in revenues.

Finance director Clemens Boersig refused to comment on talk in Stern magazine by chairman Rolf Beuer of a relocation of the bank's German administrative HQ.