UPDATE 2-Deutsche Postbank has Q4 miss, hikes provisions

* Q4 pretax loss 269 mln euros vs I/B/E/S avg 47 mln profit

* Q4 net loss 126 mln euros vs I/B/E/S 26 mln profit

* Says had to restate 2008 earnings

* Says has increased default probability for CDOs

* Shares off lows, still down 0.93 percent to lag MDAX

(Adds details, share price)

By Edward Taylor

FRANKFURT, Feb 18 (BestGrowthStock) – Deutsche Postbank (DPBGn.DE: )
dove to an unexpected fourth-quarter loss as it doubled loan
loss provisions and warned of further defaults on its structured
credit portfolio.

The Bonn-based lender said an accounting enforcement panel
requested it book losses more aggressively, a cleanup move that
could benefit Deutsche Bank (DBKGn.DE: ), which has an option to
raise its stake in Postbank to a majority by 2012.

Germany’s biggest retail bank by customers booked 90 million
euros ($122 million) in loan loss provisions in the bank’s 2008
earnings statement rather than in 2009 results.

It will also review risk positions in its real estate
lending business, especially portfolios in the United States and

The review comes on the back of worse-than-expected real
estate exposure at Spanish peer BBVA (BBVA.MC: ), which hiked
provisions for property-related losses last month.

Postbank said its pretax loss for the three months through
December narrowed to 269 million euros ($365 million) from a
restated 956 million euros a year earlier thanks to a positive
performance of its core retail lending business. Its net loss
for the period came in at 126 million euros.

According to Thomson Reuters I/B/E/S estimates, the market
had been expecting a pretax profit of 46.8 million euros and a
net profit of 25.7 million euros.

Fourth-quarter earnings were marred by a 157 million euro
charge to cover potential defaults on collateralised debt
obligations as the bank struggles to put the credit crisis
behind it.

Postbank shares fell on the news, but analysts at Keefe
Bruyette and Woods said the more aggressive booking of losses
“could ultimately be well received”.

Shares were down 0.93 percent to 22.4 euros by 1106 GMT,
while Germany’s midcap index (.MDAXI: ) was 0.52 percent firmer.
It is scheduled to publish full 2009 results on Feb. 25.

After warning in January that it expected further losses in
the fourth quarter, Postbank on Thursday said allowances for
losses on loans and advances in the fourth quarter rose to 310
million euros from 194 million euros in the year-earlier period.

It expected the level of provisions to decline in the
quarters ahead.

The bank said its Tier 1 capital ratio had improved to 7.6
percent at the end of 2009 from 7.2 percent in 2008.


(Editing by Sharon Lindores)
($1=.7377 Euro)

UPDATE 2-Deutsche Postbank has Q4 miss, hikes provisions