(Bloomberg) -- Deutsche Bank AG’s dealmakers suffered their worst quarter since the financial crisis as revenue from advising on stock and debt issuance evaporated.

Investment bankers who usually bring in around €500 million ($500 million) on average in quarterly revenue, earned just €95 million from advising on mergers and capital raising this time around. Income from debt issuance slumped to €6 million in the third quarter, while the equity business even recorded a negative €2 million. 

The performance was a sore spot in an otherwise strong quarter for the bank, as the much larger trading business did better than peers and income from lending surged on the back of higher interest rates. The lender blamed the investment banking performance in part on mark-downs in its leveraged debt business during the quarter. 

In all, the 85% slump in investment banking revenue -- also known as origination and advisory -- was worse than anything the large Wall Street firms had reported. It was also the lowest since the third quarter of 2008, when the collapse of Lehman Brothers Holdings Inc. paralyzed financial markets, Deutsche Bank filings show.

The company reorganized its businesses several times since then and the figures reported for advisory and origination revenue at different times may not be fully comparable.

Even without the mark-downs, origination and advisory would have been down 63% from a year earlier, Deutsche Bank said. That implies paper losses of about €145 million on the leveraged debt. The lender said it also marked down “a residual equity position,” without giving details.

Deutsche Bank isn’t alone in suffering losses on such holdings. Barclays Plc said it recognized about £190 million ($220 million) in fair value losses on leveraged financings last quarter, though it recorded those in the corporate bank. Even without that impact, fees at the investment bank declined 45%.

Deutsche Bank has already laid off dozens of origination and advisory staffers within its investment banking division, Bloomberg reported last week, as fears of a recession stymie dealmaking. Among the departures was Mason Parker, a managing director in the leveraged finance business, a person with knowledge of the matter said.

Chief Financial Officer James von Moltke said he doesn’t expect further writedowns on the debt, and that investment banking revenue should rebound next year when markets have more certainty where interest rates are headed.

“At that point, the dealflow begins to come back,” he said in an interview on Bloomberg TV. “If I had to guess, it would be in the second half of next year.”

--With assistance from Tom Metcalf.

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