Transition positions Deutsche Bank for growth in 2011: boss
Germany's biggest bank, Deutsche Bank, plans to bolster retail banking activities this year after posting a 54 percent drop in 2010 net profit to 2.3 billion euros ($3.2 billion), it said on Thursday.
When charges and restructuring costs related to acquisitions of the German Postbank and asset management group Sal. Oppenheim were excluded, pre-tax profit jumped by 25 percent to 6.5 billion euros however, the bank added.
Its shares soared in midday trading on the Frankfurt stock exchange.
Taking into account various one-off charges, net profit fell to 4.0 billion euros in 2010 from 5.2 billion one year earlier, a statement said.
"For Deutsche Bank, 2010 was a year of transition and investment in the future," chairman Josef Ackermann told a press conference in Frankfurt after the results had been published.
The bank was now positioned to generate more revenues, he added, confirming an ambitious 2011 pre-tax profit target of 10 billion euros.
"Barring any major negative surprises, we feel we will reach this target, which would be Deutsche Bank's best result to date," Ackermann said.
Deutsche Bank said it would propose an unchanged dividend of 75 euro cents per share for 2010.
Its stock leapt by 2.53 percent to 45.55 euros, giving it a big lead over any other gainers in midday trading on the Frankfurt stock exchange Thursday, while the DAX index of leading stocks was essentially flat overall.
Deutsche Bank generated an operating profit of 7.2 billion euros in 2010, of which 6.0 billion euros came from investment bank activities, "the second best preformance in its history" following record results in 2006, Ackermann said.
But the Swiss banking chief, who will step down in 2013, has now begun to diversify Deutsche Bank's operations to reduce its vulnerability to financial market developments.
The German bank has thus purchased Sal. Oppenheim to bolster private banking and asset management revenues, parts of the Dutch bank ABN-Amro, and Postbank, which has the biggest retail network in Germany.
Deutsche Bank is also looking closely at operations in Asia, and especially at China and India.
Deutsche Bank wants to become one of the three biggest investment banks and one of the five biggest wealth management groups in the region, Ackermann said.
To finance its acquisition of Postbank and meet Basel III international banking standards, Deutsche Bank carried out a capital increase worth 10.2 billion euros in the third quarter of 2010.
The bank's core Tier 1 capital ratio, a measure of its ability to withstand major shocks, thus climbed to 12.3 percent at the end of the year from 11.5 percent at the end of September.
In the fourth quarter of 2010, Deutsche Bank's net profit fell by more than 53 percent to 605 million euros meanwhile as it booked charges related to its acquisitions and restructuring plans
But the German bank also sharply decreased the provisions booked against loan losses, cutting them by 52 percent for the full year to 1.3 billion euros.
© 2011 AFP