Deutsche Bank, Germany's biggest bank, has estimated that its first quarter write-downs will hit about €2.5 billion due to bad loans in the housing sector.
'Conditions have become significantly more challenging during the last few weeks,' the bank said. Its official first-quarter results are to be reported April 29.
Deutsche Bank warned last week that it might miss 2008 earnings targets due to the international financial turmoil.
The bank is aiming for pre-tax profit of €8.4 billion, down slightly from €8.7 billion last year.
In 2007, Deutsche Bank managed to avoid massive losses that hit other big international banks following the collapse of the US market for high-risk, or sub-prime, mortgages.
This year, however, the bank may not be able to make up for weaker activity in financial products, which helped its investment bank division provide the majority of profits in 2007, it said last week.
