Despite the loss, and the write-downs, the figures pale in comparison to other banks, which have seen their write-downs balloon.

The largest was reported by Switzerland's UBS AG earlier this month which said it saw losses and write-downs of approximately US$19 billion in the first quarter, bringing its tally to US$37.4 billion.

Also in April, Deutsche Bank had given fair warning to markets, saying it expected at least euro2.5 billion in write-downs in the first quarter, slightly less than what it reported.

To date, Deutsche Bank has had to write down approximately euro5 billion.

The Frankfurt-based bank lost euro141 million in the first quarter compared with a euro2.1 billion profit a year earlier.

However, it still beat expectations because the net loss was lower than the euro235 million figure that analysts polled by Dow Jones Newswires were expecting.

The bank's after-minorities result was a loss of euro131 million in the January-March period.

'The state loss figure is more or less in line with the magnitude of expectations,' said Andreas Weese of UniCredit in Munich.

'All in all, Deutsche Bank's quarterly loss was in line with expectations only due to high disposal gains.'

Deutsche Bank said its net interest income rose to nearly euro2.7 billion in the first quarter compared with euro2.05 billion last year while its net commission income was down to euro2.5 billion from euro2.9 billion.

Bank chief executive Josef Ackermann minced no words about the performance, or the state of the markets in general.

'In the first quarter of this year, financial market conditions were the most difficult in recent memory. In the month of March, pressure on the banking sector was more intense than at any time since the current credit downturn began,' he said in a statement.

'Inevitably, this left its mark on Deutsche Bank's results.'

'Nevertheless, relative to the environment and the industry, this is a solid performance.'

Despite its loss, the bank's result was cushioned by its decision to sell off investments in automaker Daimler AG, insurer Allianz SE and gas company Linde AG, which let the bank book a capital gain of euro854 million.

However the capital gains were offset by some mark downs, the biggest of which was a reevaluation of its option to buy more shares in China's Hua Xia Bank.

Deutsche Bank shares were down 1.4 per cent to euro75.70 in Frankfurt trading.

Turning to the latest write-downs, the bank said the figure was net of hedges, taxes and fees, and related to the dropping value of 'leveraged loans and loan commitments, commercial real estate and residential mortgage-backed securities' of predominantly Alt-A positions - which are less risky than subprime loans.

Of the euro2.7 billion, some euro1.77 billion affected leveraged finance loans and loan commitments, while another euro885 million was for commercial real estate and residential mortgage-backed securities, or RMBS. -- AP