Deutsche Bank, Germany's largest lender, today revealed that pre-tax profits fell by 94 per cent in the third quarter to just €93 million after it was forced to make a €1.2 billion writedown.

The bank also cautioned about future dividend payouts and warned that profitability was set to fall for several quarters with the global financial turmoil expected to continue to impact earnings

Deutsche Bank has avoided a bailout from its central bank but has raised €2.2 billion in a rights issue to finance buying a stake in Deutsche Post.

Today's results were better than expected and large losses in the investment banking arm were partly offset by growth in its retail bank in Germany as worried savers rushed to apparent safety.

Josef Ackermann, chairman of Deutsche Bank, said: "The third quarter 2008 was characterised by a considerable intensification of the credit crisis in September."

The bank said its Tier 1 capital ratio of own funds to total assets had risen to 10.3 per cent from 9.3 per cent at the end of the second quarter, meaning it was keeping more of its own money on hand to back up operations.

He warned that the eurozone economy including Germany would shrink in 2009 and that the part nationalisation and greater regulation of banks would "reinforce the effect of considerably lower profitability" .

He also warned of a "significant decrease in profitability“ as the bank brought borrowing down to meet investors' demand for large equity buffers.

"The process of deleveraging - which also reduces the ability to lend - has just started and is expected to extend over several quarters likewise contributing to a significant decrease in profitability."

Mr Ackermann added: "My colleagues and I all feel a strong sense of duty to steer Deutsche Bank through this difficult environment. In these circumstances, the group executive committee has decided to make itself ineligible for bonuses this year. The supervisory board has taken a similar step."

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