It may not have been Deutsche Bank’s intention to announce plans to write down $3.95 billion in the first quarter, just as UBS slammed the world with its blistering news today, but as far as timing goes, it was pitch-perfect. Why we reckon this likely will go over a bit more smoothly than, say, a Paulson-backed financial-system overhaul.

Deutsche Bank AG said Tuesday said it expects to mark down €2.5 billion ($3.95 billion) in the first quarter, reflecting deteriorating market conditions for the global financials sector.

Germany's largest bank by market value issued a statement before market opening stating that "conditions have become significantly more challenging during the last few weeks."

"Reflecting this environment," the Frankfurt-based bank expects around €2.5 billion in write-downs in the first quarter 2008 related to "leveraged loans and loan commitments, commercial real estate, and residential mortgage-backed securities (principally Alt-A)."

Earlier Tuesday, Swiss bank UBS AG unveiled further credit trouble in the form of more write-downs that will cause a big first-quarter loss and requires a capital increase. (See related article.)

Deutsche Bank said that despite the additional write-downs it will reach its Tier 1 capital ratio of 8%-9%, in line with the bank's forecasts.

The bank's chief executive, Joseph Ackermann, will address a banking conference in London later in the day. The bank said that Mr. Ackermann will comment on the operating environment during the first quarter of 2008, Deutsche Bank's positions in key areas, and the financial impact of these positions.

In March, the German bank already warned it may not reach its full-year pretax profit target and that further write-downs were to be expected if market conditions remained unfavorable.

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