Deutsche Bank, which covers services including wealth management, reported a net income of €645 million ($1.0 billion) in the second quarter of 2008, down sharply from the €1.8 billion figure reported in the same period last year.

Germany’s largest bank said it logged write-downs in connection to residential mortgage-backed securities of €2.3 billion. Meanwhile, at the end of the quarter, its Basel Tier 1 capital ratio, which is a closely watched barometer of a bank’s financial strength, was 9.3 per cent, up from 9.2 per cent in the first quarter of 2008.

Among the asset and wealth management segment of the business, net revenues fell by 16 per cent to €962 million, reflecting lower fee and commission income stemming partly from weaker markets. On the private and business client segment, net revenues rose by 2 per cent on the second quarter of 2007 to €1.5 billion.

“We remain cautious for the remainder of 2008. Deutsche Bank has clear priorities. We will continue to strictly manage cost, risk and capital, and to reduce our exposures in key areas. We will seek opportunities to gain market share by capitalising on our relatively robust performance through the current downturn. We will continue to invest in all our core businesses, both organically and by acquisition, but we will not relax our discipline,” Josef Ackermann, chairman of the management board at Deutsche, said in a statement.