Deutsche Bank AG said Tuesday that it expects first-quarter losses of $4 billion due to "significantly more challenging" market conditions triggered by the U.S. subprime collapse.Germany's largest bank warned last week that it may have been harder hit by the crisis than it had previously announced, with possible losses in some lending divisions. In a statement issued Tuesday before an address in London by chief executive Josef Ackermann, the bank acknowledged concrete losses for the first time.

"Conditions have become significantly more challenging during the last few weeks," the bank said. "Reflecting this environment, Deutsche Bank anticipates in the first quarter 2008 markdowns in the region of 2.5 billion euros, related to leveraged loans and loan commitments, commercial real estate and residential mortgage-backed securities."



Despite the write-downs, the bank said it expected to stay on its course.

Deutsche Bank shares were down 0.96 percent, trading at 71.01 euros ($112.28).

Word of the losses came just a short time after Zurich-based rival UBS AG announced another $19 billion in writedowns on its U.S. real estate and related credit positions. UBS posted a first-quarter loss of 12 billion Swiss francs ($12.1 billion), and its chairman Marcel Ospel resigned. UBS recorded a 16 billion Swiss franc write-down in the second half of 2007.

Frankfurt-based Deutsche Bank reported no subprime-related write-downs in the fourth quarter, but said that they totaled 2.2 billion euros ($3.5 billion) in the third-quarter of 2007.

The bank is to publish its earnings for the first quarter of 2008 on April 29.

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