Two of Europe’s largest investment banks on Wednesday played down concerns that they would need to raise additional capital to cover losses from the credit crunch, raising investors’ hopes that the worst damage from the turmoil may be over.

Deutsche Bank dismissed fears of a profit warning that had weighed on its share price in recent days, declaring that the German bank should report a profitable quarter for the three months to the end of June. The news came as Peter Kurer, chairman of UBS, told a Swiss television channel that the bank would not need additional capital following its $15bn rights issue.