Advertisement

  • News
  • Columns
  • Interviews
  • BW Communities
  • Events
  • BW TV
  • Subscribe to Print
  • Editorial Calendar 19-20
BW Businessworld

Deutsche Bank Seals Succession As Trading Wilts

Photo Credit :

The bank warned it may miss its goal of generating 6.4 billion euros from investment banking due to the European debt crisis but stuck by its target of 10 billion euros in pretax profit this year for the group as a whole.

Reaching that target "is dependent on swift and sustained resolution of the European sovereign debt crisis and a return to a significantly improved operating environment in the second half of 2011," the bank said.

That means it will have to rely more on retail banking as well as wealth and asset management to meet the full-year targets set by outgoing Chief Executive Josef Ackermann.

The shares were indicated to open 1 per cent lower, according to brokerage Lang & Schwarz.

The news comes only hours after Deutsche Bank named investment banking head Anshu Jain and Juergen Fitschen, head of the lender's business in Germany, as co-chief executives from 2012.

Its second-quarter pretax profit rose 17 per cent to 1.8 billion euros ($2.6 billion), less than the 1.97 billion consensus in a Reuters poll. Net profit remained flat at 1.2 billion euros.

"Just like its competitors, Deutsche Bank saw weaker investment bank earnings in the second quarter," WestLB analyst Georg Kanders said.

Last week, Morgan Stanley surprised Wall Street with better-than-expected earnings, driven by strong trading in equity and fixed-income markets.

That provided a sharp contrast with rival Goldman Sachs, which rattled investors with disappointing earnings and a 53 per cent revenue drop in its fixed income, commodities and currencies business last week.

Jain, the 48-year-old Indian-born head of Deutsche Bank's investment bank, will share power with Fitschen, the 62-year-old native German responsible for business in Europe's largest economy, the bank said on Monday.

Deutsche Bank said its core businesses of private clients and asset management and the corporate and investment bank delivered a pretax profit of 5.5 billion euros in the first half of 2010.


 


(Reuters)