Mr 25%

29 October 2004 By Chris Hughes

The German bank has used its latest results as an opportunity to ram home its commitment to achieving a 25% returnonequity next year. But the results imply that Deutsche s real problem is its unbalanced business mix. Focusing on profitability won t address that.

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Deutsche Bank posted thirdquarter net profit of E680m, up from E576mn in the same period last year.

It recommitted itself to achieving a 25% pretax return on equity for 2005. Pretax return on equity was 16% in the quarter, up from 11% in the same period in 2003.

Josef Ackermann, chairman of the executive committee, said: "We continue to reap the benefits of our transformation strategy, and our overall performance in this environment was very robust. However, specific business areas were impacted by tough operating conditions, and the management team has taken decisive action to boost performance.

The corporate banking and securities unit posted revenues of E2.4bn, down 15% on the quarter and 13% on the year. Its pretax income was E466m, a fall of 35% on the quarter and 22% on the year.

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