Deutsche Bank Earnings Double
FRANKFURT, Germany (AP) _ Deutsche Bank AG, Germany’s largest financial house, said Thursday that profits more than doubled in 2000 but warned it would slash up to 2,600 jobs in coming months as part of its restructuring program.
According to preliminary figures, net profit rose to 4.94 billion euros ($4.6 billion) last year from 2.45 billion euros in 1999, in line with analyst forecasts. Based on the results, Deutsche Bank said it will increase its dividend to 1.30 euros per share ($1.22) from the previous 1.15 euros per share.
Still, Deutsche Bank shares fell 5.45 percent to 98.90 euros ($92.97) in midday trading after chairman Rolf Breuer admitted there was ``definite slowdown in the third and fourth quarters″ and warned of a ``bumpy road in the year ahead.″
Deutsche Bank will release final results March 29.
Last year’s earnings increase was fueled in part by strong trading income and commission fees. Trading income rose 52 percent to 6.9 billion euros ($6.5 billion) last year, while commission income increased 42 percent to 11.5 billion euros ($10.8 billion), the bank said.
At the same time, administrative costs rose 34 percent, the bank said. It attributed the increase to expansion, spending on electronic commerce projects and extra software costs in the fourth quarter.
Net interest income rose to 6.81 billion euros ($6.4 billion) in 2000 from 6.61 billion euros in 1999.
Deutsche Bank also detailed plans to reorganize two divisions: an Asset Management and Private Clients Group catering to wealthy clients and a Corporate and Institutional Clients Group focused on business lending and securities trading.
Breuer said that streamlining would result in 2,600 job cuts. He said operations in Germany will be hardest hit, but other cuts will affect London and New York.
Breuer will head the lucrative Private Clients and Asset Management Group with the goal of increasing the unit’s profits by 30 percent over the next three years.
Josef Ackermann, who will become chairman of Deutsche Bank after Breuer retires in May 2002, will lead the Corporate and Institutional Clients Group. The bank hopes that unit will see profit growth of 10 percent over the next three years.