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Frankfurt - The scale of the fallout from the turmoil that has swept global markets in the wake of the US housing industry crisis further emerged on Thursday with two leading German banks detailing the risks to their balance sheets.
While Deutsche Bank said that the global market turbulence would hit Germany's biggest bank third-quarter results, Commerzbank reaffirmed what it said in July that it had laid aside €80m ($112m) to cover losses resulting from the US subprime mortgage market.
Commerzbank has €1.2bn linked to subprime-linked investments, Germany's second-largest listed bank said.
Speaking on state German television ZDF Thursday, Deutsche Bank chief Josef Ackermann said: "Deutsche Bank also made mistakes during this crisis."
The news undercut Deutsche Bank shares, which slumped at one point by more than 3% following his comments.
By late morning trading shares in Commerzbank had edged up 0.17% after the Frankfurt-based bank said it remained on a growth course despite the US subprime mortgage market upheaval.
"We have the costs under control," said Commerzbank chief Klaus Peter Mueller. "Possible additional losses resulting from the subprime crisis will not have a significant impact on our dynamic development from today's point of view," he said.
Commerzbank has maintained its target of a return on equity of more than 12% this year, said Mueller.
In recent weeks as concerns have grown that the US housing market crisis would trigger a global credit crunch, Ackermann tried to allay investors' fears saying his bank remained confident that it could meet next year's profit margins despite the threat posed to trading income by the turbulent markets.
Ackermann said that Deutsche Bank had leveraged-loan commitments of €29bn with the bank possible facing a third-quarter charge of €625m.
The comments by the chiefs of the two banks come as part of the buildup to the third-quarter earnings report season with Deutsche Bank to report its third-quarter result on October 31 and Commerzbank on November 7.
Global banking authorities have been struggling to come with grips with the fallout from the US housing industry crisis with Germany's financial sector emerging as a major victim of the market upheaval.
Last month German state-owned bank Landesbank Baden-Wuerttemberg (LBBW) acquired in an emergency sale the publicly owned Sachsen LB, which was reeling from the housing market crisis.
In July, State-owned development Kreditanstalt fuer Wiederaufbau (KfW) led a group of banks in an €8.1bn rescue operation for German business bank IKB Deutsche Industrie AG.
- Sapa-dpa