BERLIN (AP) -- Shares in Deutsche Bank dropped Thursday after the company said it would post a multibillion-euro loss in the third quarter and may scrap this year's dividend payment.
In an unscheduled statement late Wednesday, Germany's biggest bank said it expects to report a third-quarter net loss of 6.2 billion euros ($7 billion) because of a combination of write-downs and litigation costs. It also said its management board will recommend a reduction or possible elimination of the dividend for this year.
Despite the scale of the potential loss and the prospect of no dividend payment, investors initially responded positively to the move by the bank's new leadership, pushing the shares higher. But by the close of markets in Frankfurt they were down 1.8 percent at 25.03 euros ($28.17).
New co-CEO John Cryan, who took the helm in mid-summer, wrote to employees that Deutsche Bank was taking charges totaling 7.6 billion euros for the July-September quarter.
The lion's share of that comes from 5.8 billion euros related in part to writing down the value of units within its corporate banking and private client divisions. Specifically, the bank noted Bankers Trust, which it bought in 1999, and Deutsche Postbank that it acquired in 2010. Deutsche Bank now plans to spin off Postbank branches.
Deutsche Bank is also revaluing its 19.99 percent holding in China's Hua Xia Bank, a move driven by a decision to no longer consider the stake strategic. That will cost it 600 million euros.
The bank also is making litigation provisions of some 1.2 billion euros, which Cryan said "may be affected by further events" before final quarterly results are released on Oct. 29.
Cryan took over July 1 after co-CEOs Anshu Jain and Juergen Fitschen announced they were leaving. Fitschen will remain until May 2016, after which Cryan is to become sole CEO. In recent years, Deutsche Bank has struggled to get over legal issues dating back years and has seen disappointing profits.