Frankfurt - Germany's biggest bank Deutsche Bank AG reported Thursday a 64 per cent fall in second quarter earnings on the back of write-downs totalling 2.3 billion euros (3.6 billion dollars).

The Frankfurt-based bank said that net profit fell to 649 million euros from 1.78 billion euros in the second quarter last year.

This comes in the wake of a 311-million-euro pretax loss run up by Deutsche's key investment banking business as a result of the continuing fallout from the financial market crisis triggered by the US subprime mortgage upheaval.

"We remain cautious for the remainder of 2008," said Deutsche Bank chief Josef Ackermann releasing the results.

However, unlike many of its global banking peers Deutsche appears to have escaped the worst of the effects of the subprime mortgage crisis and the resulting credit crunch.

Deutsche group's pretax second quarter profit slumped to 642 million euros from 2.7 billion profit in the same period last year.

Announcing the results, Ackermann also confirmed that Deutsche remained on the look out for possible acquisitions.

"We will continue to invest in all our core businesses, both organically and by acquisition, but we will not relax our discipline," he said.

Indeed, the latest German bank reporting season comes against the backdrop of signs that the nation's fragmented banking sector could be on the brink of a long overdue round of consolidation.

Apart from a possible merger between two of Deutsche's cross-town rivals - Dresdner and Commerzbank - the German mail and logistics group Deutsche Post AG has flagged plans to possibly sell off this its banking offshoot, Deutsche Postbank AG, this year.

Deutsche has already indicated that it would be interested in buying Postbank, which is a major force in German retail banking. (dpa)