UPDATE 1-Deutsche Bank warns of lower Q3 investment bank revenue
* Deutsche Bank says subdued markets to hit revenue
* Sees Q3 sales and trading declining significantly
* Deutsche Bank slowdown mirrors broader market trend
FRANKFURT, Sept 25 (Reuters) - Deutsche Bank co-Chief Executive Anshu Jain has warned that third-quarter investment banking revenue would be significantly lower than a year ago, as a lull in bond market trading hits Germany's flagship lender.
"Market activity (has been) substantially lower, which has affected our CB&S (investment banking) revenues", Jain told an investor conference in London.
"We currently anticipate debt sales and trading revenues in the third quarter to decline significantly from last year," he said.
Jain said revenue last year had received a boost from stimulus measures by the European Central Bank, which made a pledge to do "whatever it takes" to safeguard the euro, a statement that led to a boost in trading activity.
JP Morgan analysts forecast that Deutsche Bank's third-quarter revenue from fixed income, currencies and commodities (FICC) could fall 31 percent on the year to 1.6 billion euros ($2.2 billion).
The slowdown in bond market trading has been blamed on expectations that the U.S. Federal Reserve would start "tapering" its bond buying programme, though the Fed last week surprised investors by holding off on the start of the process.
Barclays said last week income in July and August was down 500 million pounds ($802 million) from a year ago, mainly due to weakness in its FICC division.
Deutsche Bank and Barclays are Europe's top fixed income firms and each gets about 55 percent of its investment bank revenue from FICC.