Deutsche Bank, Germany''s biggest lender, said Wednesday it would take charges of roughly 2.2 billion euros (3.1 billion
dollars) to cover losses connected with the US home-loan crisis. But the bank, the latest major institution to disclose damages attributed to the meltdown in the US high-risk mortgage
market, still expected net third-
quarter profit to exceed 1.4 billion euros, chairman Josef Ackermann said. He told an investor conference in London Deutsche Bank was also sticking to its full-year pre-tax profit target of 8.4 billion euros, barring any more market turmoil. Ackermann said the bank would book the charges to cover leveraged loans and loan commitments, as well as losses from "structured credit products, residential mortgage-backed securities and relative value trading in both credit and equities." As a result of those charges, the bank''s corporate banking and securities division "is likely to report a net pre-tax loss in the quarter, currently estimated in the range of 250-350 million euros," a statement said. "Despite a challenging quarter for our investment banking franchise, our ''stable'' businesses continue to perform well," the statement quoted Ackermann as adding. "We see substantial opportunities in investment banking after this period of correction," he said. The news came two days after two other global banking giants, Citigroup of the US and the Swiss bank UBS said they had also been hit hard by turbulence after the US market for high-risk home loans, the subprime market, collapsed. Citigroup said it expected a 60-percent drop in third-quarter profit due in part to failed mortgage investments, while UBS announced a hit of 4.0 billion Swiss francs (3.4 billion dollars, 2.4 billion euros). Many major banks have decided to make clear their losses from the global banking crisis as quickly as possible to try to put the issue behind them. Ackermann stressed that Deutsche Bank directors would "stay the course and remain committed to our publicly-stated financial targets for 2008, including pre-tax profits of 8.4 billion euros, assuming normally functioning markets." Investors appeared to appreciate the clarification, and shares in the bank shot up by 1.99 percent to 95.38 euros in morning trading on the Frankfurt stock exchange, where the DAX index of leading shares was essentially flat in thin trading because Thursday was Germany''s national holiday. Many analysts have suggested that the third quarter of 2007 would see a flood of write-downs following the banking crisis that began with the meltdown of the US subprime market. When large numbers of US home owners began defaulting, the value of securities that had been issued based on their future payments plummeted and global money markets dried up as banks became nervous about lending to each other. In mid-September panicked savers queued to take their money out of the British lender Northern Rock after it was forced to apply for emergency funds from the Bank of England. Two German banks, IKB and SachsenLB, were pushed to the brink of bankruptcy and investors had been waiting to find out how big the losses were at the largest private banks like Deutsche Bank and Commerzbank.