Dresdner Bank has announced a €350 million ($513 million) write-down on its asset-backed securities trading book, citing “financial market turbulence” during the third quarter as the reason for the hit.
The firm’s €18 billion ($26.4 billion) asset-backed securities exposure includes collateralized debt obligations and collateralized loan obligations, according to an announcement by the firm, though U.K. press reports suggest the hit was not as bad as initially feared. Hedging techniques had managed to limit its economic exposure to €7.9 billion ($11.5 billion).
The bank also took a €30 million ($44 million) hit on leveraged finance and approximately €200 million ($293 million) in other business lines. “The total effect of the financial market turbulence on the Bank's profit and loss statement amounted to €575 million ($843 million)," according to an announcement by the German insurance giant Allianz, Dresdner’s parent company.