Deutsche Bank, Germany’s biggest bank, today disclosed its first quarterly loss in five years as Allianz said that the problems at its Dresdner Bank operation could threaten medium-term profits goals.

Deutsche wrote off €2.7 billion (£2.1 billion) from the credit crunch while which pushed it into losses of €254 million, down from a €3.16 billion profit. It suffered from a €1.77 billion mark-down on leveraged loans and $885 million mark-down on commercial real estate and residential mortgage-backed securities.

Overall charges were slightly higher than the €2.5 billion flagged earlier this month. The result would have been worse had the bank not cashed in investments such as a stake in carmaker Daimler, worth €854 million.

Josef Ackermann, Deutsche’s chairman and chief executive, said that financial market conditions in the first quarter of this year “were the most difficult in recent memory”.

In a conference call, Deutsche declined to reiterate its full-year pre-tax target of €8.4 billion.

Chief financial officer Anthony di Lorio, said: “These are very uncertain times, the markets are unpredictable.” He added that, due to the current market turmoil, Deutsche cannot forecast what its full-year result wouold be .

At Allianz, Dresdner Bank wrote off €900 million, more than double those announced by the insurer’s finance director Helmut Perlet, at the beginning of the year.

The latest provisions bring Dresdner Bank’s overall bill from the global market turmoil to about €2.5 billion. Allianz said that its medium-term targets, while still feasible, would become harder to reach the longer the financial crisis lasts. The insurer has said it aims to increase operating profit by an average 10 percent in 2008 and 2009.

The Munich-based group said that its net profit in the first three months of this year came to about €1.1 billion and its operating profit to €1.8 billion.

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