Deutsche Bank has revealed a steep fall in quarterly profits, missing market expectations with its first results reported under new co-chief executives Anshu Jain and Jürgen Fitschen.

Germany’s largest bank by assets said it would take extra steps to cut its risks because of the lower than expected income, which affects Deutsche’s plans to reach its capital targets through its retained earnings.

Following some of its U.S. peers in reporting a tough second quarter, Deutsche said net income was about €700-million in the three months to the end of June compared with €1.2-billion in the same period a year ago. Analysts had expected about €1-billion of net income.

In figures released ahead of their expected publication next week, Deutsche said quarterly revenues were down from €8.5-billion a year ago to €8-billion.

The bank, one of the largest in the euro zone, also said costs rose because a weaker euro made its U.S. and U.K. operations more expensive. Deutsche is set to lay off about 1,000 staff from its investment bank.

The world’s biggest investment banks have been hit by steep declines in fixed-income trading and Deutsche, which did not reveal the results of its individual divisions, is likely to have been similarly affected because of its large fixed-income business. In the first quarter, Deutsche’s net income fell by one-third and revenues by 12 per cent compared with the same period in 2011.

Deutsche said it would still reach a core Tier 1 capital ratio target of 7.2 per cent for the start of next year, a figure simulated to meet new “Basel III” rules for global banks. “Lower full-year net income projections will be mitigated by additional de-risking measures,” the bank said.

Jon Peace, analyst at Nomura, said: “It looks as though the currency effects on the cost side have brought down the bottom line but you would have also expected revenues to provide an offset and they haven’t.”

“Credit Suisse raised the bar with its capital-raising and although Deutsche has reaffirmed its guidance on its core Tier 1 capital for next year, it still looks light compared with some peers, especially for a bank so exposed to euro zone woes.”

Mr. Peace said investors still expected the new chief executives might need to make some bold moves to improve the capital position.

Mr. Jain, former head of the corporate and investment bank, and Mr. Fitschen, the bank’s head in Germany, took over on June 1 after Josef Ackermann’s decade as chief executive.

Deutsche said pre-tax profits would be €1-billion compared with €1.8-billion last year.