DEUTSCHE BANK will make its first annual loss in five decades after losing €4.8 billion ($6.3 billion) in a turbulent last quarter that exposed weaknesses at the bank, according to Josef Ackermann, chief executive.

The deep quarterly loss is the worst performance by Deutsche during the financial turmoil and will push Germany’s largest bank to a net loss of €3.9 billion in 2008. The full earnings announcement is on February 5th.

Deutsche is the first big European lender in 2009 to produce an update on the final three months of 2008, which included the most volatile days of the crisis. It will raise fears that many other banks might be nursing steep losses following the collapse of Lehman Brothers.

Mr Ackermann said unprecedented volatility and the need to cut risk in illiquid markets had affected Deutsche’s investment banking operations, particularly in credit and equity derivatives trading and proprietary trading. He said management of some areas had been “restructured”, with some senior managers leaving. Some proprietary trading businesses have been closed or sharply cut back.

RBS analysts, who had expected a small loss, said the bank had issued a “massive profit warning”. Shares in Deutsche fell 8.8 per cent to €22.13.

The acknowledgment of a torrid fourth quarter came as Deutsche revealed a restructured €4.9 billion deal to buy Postbank, Ger-many's largest retail bank, from Deutsche Post. The logistics company, 30 per cent of which is owned by the state, will become the largest shareholder in Deutsche Bank after the renegotiated deal. Deutsche Post can sell its 8 per cent stake from April and does not intend to remain a long-term bank shareholder. – ( Financial Timesservice)