Deutsche Bank results cement turnaround

08:16, February 05, 2010      

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Deutsche Bank AG, Germany's biggest bank, posted its fourth straight quarterly profit on a rebound in trading, cementing a turnaround after reporting a record loss a year earlier.

The Frankfurt-based bank had net income of 1.3 billion euros ($1.8 billion) in the fourth quarter after a loss of 4.8 billion euros in the year-earlier period, it said in a DGAP statement yesterday.

Deutsche Bank, like New York-based Goldman Sachs Group Inc and JPMorgan Chase & Co, recorded a rebound in profit last year after emerging from the worst financial crisis since the Great Depression. Revenue from trading declined in the fourth quarter as business slowed before year-end and competition increased, shrinking margins.

"Deutsche Bank is a relative winner of the crisis within the investment-banking world," said Andrew Lynch, who helps manage about $2 billion at Schroder Investment Management in London, including Deutsche Bank shares. He spoke before the earnings were published.

Deutsche Bank has gained 122 percent to 45.82 euros in Frankfurt trading over the last 12 months, compared with a 57 percent gain in the 52-company Bloomberg Europe Banks and Financial Services Index.

Fourth-quarter net income reflected a tax benefit of 554 million euros, the company said.

JPMorgan more than doubled earnings in 2009 to $11.7 billion, while profit at Goldman rose by more than five times to $13.4 billion. Deutsche Bank earned 5 billion euros in 2009.

Deutsche Bank Chief Executive Officer Josef Ackermann is trying to reduce the company's dependence on investment banking, which accounts for more than two-thirds of group profit, by making acquisitions.

He agreed in October to buy Sal Oppenheim Group, Germany's biggest independent private bank, and ABN Amro Holding NV's commercial-banking operations in the Netherlands. The bank also purchased a stake in German retail lender Deutsche Postbank AG and has an option to increase the holding.

"The business model is still tilted toward investment banking, but you can't turn a super tanker around on a dime," said Lynch.

Deutsche Bank said in December that pretax profit may reach a record 10 billion euros in 2011 as it boosts earnings at the corporate and investment bank, helped by market share gains, and expands in Asia. Pretax earnings at the investment bank may rise 50 percent from the level in 2007 to 6.3 billion euros in the same period, the company forecast.

Source: China Daily
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