Fitch affirms Deutsche Bank

Fitch Ratings said it affirmed Deutsche Bank's long-term issuer default rating at AA- with positive outlook, short-term issuer default rating at F1+, individual rating at B and support rating at 1. The support rating floor is affirmed at A- and its trust preferred securities are affirmed at A+.

The affirmation follows news that Deutsche Bank expects negative mark-to-market adjustments to its leveraged loan book of up to €700 million (net of fees), as well as about €1.5 billion to its trading book. As a result, Deutsche Bank's Corporate Banking & Securities division is likely to report a pre-tax loss in the range of €250 million to €350 million for the third quarter of 2007.

Although this is a substantial hit for that division, Fitch said it regards the bank's business model to be robust enough to cope with some volatility in investment banking.

The agency said it will closely monitor the bank's performance and asset quality in the upcoming two to three quarters, which will shed more light on the prudence of the write-downs taken in the third quarter and the resilience of the bank's earnings capacity in less benign market conditions compared with the first half of 2007.

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