Dresdner Bank swings to 9 month loss of 2.4B euros

FRANKFURT: Dresdner Bank, a unit of German insurance group Allianz SE, said Monday it swung to a net loss of 2.4 billion euros ($3.1 billion) in the first nine months of the year, hurt by turbulent financial markets as well as weaker business activity.

The loss compares to a profit of 858 million euros in the year ago period.

The Frankfurt-based bank said its interest income fell 14.4 percent to 2 billion euros ($2.6 billion) in the January-September period from 2.4 billion euros a year ago.

``The broadening of the capital market crisis has affected the profits of Dresdner Bank in the first nine months,'' the bank said in a statement.

The company's operating loss reached 1.7 billion euros ($2.2 billion) in the first nine months, compared with an operating profit of 1.1 billion euros a year ago.

Dresdner Bank did not release quarterly figures. On Friday, the parent company, Munich-based Allianz SE, said the company had been adversely affected by the ongoing financial crisis and that it could not make an accurate prediction on its business this year.

Allianz reported a 2 billion euro ($2.6 billion) loss for the third quarter Friday after it said the value of its investments declined and it wrote off the value of the Dresdner Bank unit, which it is selling.

In August, Allianz agreed to sell the Dresdner unit to Commerzbank AG in a 9.8 billion euro ($13.81 billion) deal.

Allianz, Europe's second biggest insurer, said the loss during the July-September period compared with a profit of 1.9 billion euros a year earlier.

Still, that was partially offset by a profit of 545 million euros ($700 million) in continuing operations, down from 2 billion euros a year earlier.

Allianz also abandoned its forecast for the rest of the year and 2009, noting in a statement that without ``a major equity market recovery, the operating profit outlook of 9 billion euros ($11.6 billion) before banking for this year and next year cannot be reached.''

Shares of Allianz were trading down 1.4 per cent at 64.69 euros ($83.45) Monday in Frankfurt.