[A-List] Germany & the imperialist chain: Deutsche Bank

["Keaney Michael" <Michael.Keaney@xxxxxx>]

Deutsche Bank begins retail overhaul
By Tony Major in Frankfurt
Financial Times; Sep 13, 2002

Deutsche Bank launched an overhaul of its retail and business banking
operations yesterday, and said it aimed to triple profits from the
revamped division by 2004.

The move, part of chairman Josef Ackermann's drive to improve
profitability at Germany's biggest bank, will turn retail banking into a
core business, ending Deutsche's two-year search for a partner.

Under the restructuring, Deutsche will service retail clients and many
of its private banking and corporate customers through a rebranded
"Deutsche Bank" branch network.

Some 30,000-40,000 small and medium-size Mittelstand customers will be
transferred to the new division from the investment bank, which will
focus on large companies that need higher-margin advisory services and
products.

Mid-size companies, heavily reliant on low-margin lending, will be
offered simpler and cheaper services through the bank's branches.

The retail unit will also take over several thousand affluent clients
deemed not rich enough for a restructured wealth management unit.

Herbert Walter, retail banking divisional head, said the bank wanted to
reposition itself as "a one-stop shop" for "Europe's modern business and
private customers".

He said the bank would offer a full range of financial and consulting
services.

Deutsche plans to focus on its core retail banking markets -Germany,
Italy and Spain - after giving up hope of gaining a strong foothold in
France. It is in the process of selling Banque Worms, its lossmaking
French unit.

Mr Walter said Deutsche 's 12.6m clients across Europe would be serviced
through 1,300 branches, 770 of them in Germany. Specialised teams will
look after wealthy private clients and business customers.

Mr Walter said: "Our aim is to significantly boost [the new division's]
operating profits to EUR1bn ($1bn) by 2004, a near-tripling of
earnings." Mr Walter said two-thirds of the increase would come from
cost-cutting, the remainder through revenue increases.

He said the bank was in talks with unions about shedding 1,800 jobs in
the division. Some 2,200 had already been agreed. The job cuts form part
of Mr Ackermann's EUR2bn costs savings programme, which will see the
bank's headcount fall by 14,700 by 2003.

The restructuring will lead to the reintegration of Deutsche Bank 24,
which was hived off into a separate business unit in 1999.

Deutsche had planned to link DB 24 with a rival retail business but
efforts foundered after the collapse of a planned merger with Dresdner
Bank.

Now Mr Ackermann is committed to personal and private banking in an
effort to broaden Deutsche's earnings base, about 60 per cent of which
comes from volatile investment banking.

Merrill Lynch estimates that retail banking could increase its profit
contribution from 4 per cent to about 15 per cent by 2004.