The profit figure was down from 985 million euros in the same quarter a year ago and short of average expectations among market analysts of 460 million euros. The bank said Wednesday that customer trading and investment activity was muted in the quarter, which was marked by continued market turbulence from the European debt crisis that has discouraged investor activity. Income fell both from trading securities and from the commissions that are generated when customers engage in transactions.
Germany's No. 2 bank, which is still 25 percent owned by the German government after a 2009 bailout, said operating profits remained stable from its basic banking business, which focuses on lending to companies in Germany and Eastern Europe. It said the earnings comparison was skewed by a one-time gain a year ago of 358 euros million that came from the comany's move to strengthen its capital structure through a hybrid capital buyback. It bought back some of its own outstanding debt which had fallen in value, booking a gain.The bank is still selling riskier investments and lowering its borrowings in an effort to strengthen its finances, which suffered from its extensive holdings of shaky government bonds that had to be written down. It has also sold noncore businesses and is winding down its Eurohypo mortgage lender as a condition of its bailout aid.