Equities drive earnings at Deutsche
DEUTSCHE Bank showed why it abandoned talks to be taken over by Citigroup last month as its London-based investment bank helped drive up underlying pre-tax profits by 163% to e3.8bn (£2.6bn) in 2003.
The recovery in stock markets towards the end of last year boosted equity deals, while falling interest rates spurred bond trading. Income before tax for the corporate and investment bank unit soared from e800m in 2002 to e3.5bn in 2003.
In the fourth quarter, the bank turned from net losses of e105m to earnings of e436m. The final dividend is being increased for the first time in three years, by 15% to e1.50.
Chairman Josef Ackermann, who has cut almost 15,000 jobs and sold e17.5bn of assets in his bid to slash costs, is standing trial in Germany as a former Mannesmann board member.
He denies charges of aggravated breach of trust during the £110bn takeover by Vodafone.
Ackermann said: 'Our transformation strategy provides a solid foundation for continued growth. We have set aggressive but realistic targets for phase two. [We are] confident we can achieve our goal of 25% pre-tax return on equity.'
Analysts said talks between Citigroup and Deutsche were broken off after Ackermann decided a deal involving Germany's biggest bank being taken over would be too politically sensitive.
