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BERLIN — Germany's Deutsche Postbank AG reported Thursday a loss of euro14 million ($19.7 million) for the second quarter as the retail lender increased write-downs and provisions for risky loans.
The Bonn-based company, now partly owned by Deutsche Bank AG, said the loss compared to a profit of euro121 million a year earlier.
Total income, a measure of revenue, rose to euro23 million in the quarter compared with a loss of euro295 million,
The bank set aside euro157 million in the second quarter to allow for bad loans, nearly double the euro86 million set aside a year earlier. The bank warned that the figure could increase, too.
"Economic developments may result in a growing number of insolvencies and, thus, to more loan defaults which would increase the need for allowances for losses on loans and advances," it said in a statement.
Postbank shares ended down 3.5 percent at euro19.39 in Frankfurt.
Despite the grim prediction, chief executive Stefan Jutte said the bank was progressing with its development by adding new customers and keeping hold of its consumer market, all the while positioning itself to ride out more turbulence in the financial industry.
"We are continuing to apply the bank's strategy of expanding our market position and optimizing our risk profile," he said in a note to shareholders.
"Business with retail customers is and will remain our main focus," he said. "As before, we are facing an economic environment that with everything else is everything but easy."
For the first six months of the year, the bank earned euro70 million compared with euro238 million in 2008. Total income improved to minus euro24 million compared with negative euro835 million a year earlier.
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