Shares in the German bank have been hit after it signaled a $8.6 billion net loss for the third quarter amid a number of heavy charges and impairments.

Shares in Germany’s largest bank fell sharply yesterday after it announced it expected to incur goodwill, litigation and other charges totaling €7.6 billion ($8.6 billion).

The Deutsche Bank share price was down by as much as 7 per cent in after-hours trading, reports said. Today, prices were down around 1 per cent, at €25.15 per share.

Based on these charges, the bank expects to report a third quarter income, before income tax, loss of around €6.0 billion and a net loss of €6.2 billion. Year-to-date results through the third quarter are expected to be an IBIT loss of approximately €3.3 billion and a net loss of €4.8 billion. Excluding the impact of the impairment of goodwill and intangibles, the third quarter IBIT loss would be approximately €200 million.

Third-quarter results are due on October 29.

The past few months have been difficult for the bank, which has also seen a number of leadership changes.

There will be "an impairment of all goodwill and certain intangibles in Corporate Banking & Securities (CB&S) and Private & Business Clients (PBC) of approximately €5.8 billion," according to the bank.

"This is largely driven by the impact of expected higher regulatory capital requirements on the measurement of the value of these segments as well as current expectations regarding the disposal of Postbank,” the Frankfurt-listed bank said.

The bank also said there was an impairment of the carrying value of Deutsche Bank's 19.99 per cent stake in Hua Xia Bank of approximately €600 million, which reflects an updated valuation triggered by a change of the intent of the holding as Deutsche Bank no longer considers this stake to be strategic. There are also litigation provisions of around €1.2 billion, the majority of which are not expected to be tax deductible.

“Final litigation provisions in the quarter may be affected by further events before we finalize and report third quarter results,” the bank continued.

Deutsche said the impairment of goodwill and intangibles, and of the Hua Xia investment, will have no significant impact on its regulatory capital ratios. The bank expects to report a fully-loaded CRR/CRD4 common equity tier one ratio for the third quarter of approximately 11 per cent.