Deutsche Bank AG, even as it announced a round of global cutbacks in investment banking, has identified several business lines where it hopes to expand in the U.S., possibly through acquisition.

After years building its investment banking capacity, executives said Thursday that Deutsche's best chances for growth in the U.S. market are now in private banking and asset management.

The Frankfurt banking company, Europe’s largest, has built its investment bank and brokerage in the U.S. and globally, mostly through acquisition.

It got a big boost through its 1999 purchase of Bankers Trust. In size, capacity, and position in the market, “we feel that we are in a good place,” Dean Barr, the bank’s global chief investment officer, said in an interview.

Still, facing stiff competition from U.S. competitors, Deutsche Bank is taking a course many other European institutions have taken recently.

“Acquisitions will come in private banking or asset management, not in investment banking,” Rolf E. Breuer, Deutsche Bank’s chairman, said in an investor presentation Thursday. Mr. Breuer, speaking through an interpreter, added, “We’re not well enough positioned in these two fields in the United States, and this is where acquisitions can be expected.”

The bank has set a target to increase profits in the asset management and private-client sector by more than 30% a year for the next three years. However, “there are no concrete purchase plans at the moment,” Mr. Breuer said.

On Thursday the company carried out a previously announced plan to consolidate its five business units into two — product creation and product distribution — as a way to enhance cross-selling opportunities. Mr. Breuer is to oversee asset management as part of that realignment. He is scheduled to step down as chairman in 2002.

The company also set a new direction.

Deutsche Bank plans to fire about 2,600 people in the investment banking side of the business, hitting the German division the hardest but still affecting jobs in New York and London.

“We need to make up for some weaknesses in investment banking, predominantly in trading and sales, but we can’t solve that problem by acquiring a large U.S. competitor,” Mr. Breuer told investors. “It wouldn’t add anything, and overlaps and job cuts would be high. The only possibility would be someone that fit our weaknesses exactly, and that candidate hasn’t appeared.”

Deutsche Bank doubled its net income last year, to $4.66 billion. Despite the record-breaking year, however, earnings in 2000 declined from quarter to quarter, with the fourth quarter its weakest.

The bank anticipates that “2001 will be a bumpier road than last year,” Mr. Breuer said. “We’re victims of events in the world markets, and the slowdown in the U.S. economy won’t go unnoticed in our business. We are a global player and can’t shield ourselves from such trends.”

The bank said it will bolster its operations by making strategic acquisitions in unique distribution platforms. Already sizable, Deutsche Bank’s asset management business consists of about $600 billion of capital in asset management and $200 billion in the private-client business, Mr. Barr said.

Companies that have a heavy emphasis on asset management — State Street Corp. and Northern Trust Corp. among them — have stocks that trade at high multiples to earnings, a reflection of the value of the fee-based business as opposed to more transactional businesses that are vulnerable to market volatility, analysts said.

By listing itself on the New York Stock Exchange last year, Deutsche Bank has a ready currency to make acquisitions in the United States.

It has already been moving toward the retail end of the spectrum in the United States. National Discount Brokerage Group, a U.S. online brokerage business that Deutsche Bank bought in December, is linked to the company’s asset management division and should help boost volume there.

Deutsche Bank’s push to expand its asset management business came after similar actions by European competitors such as UBS AG and U.S. banking companies such as the former Chase Manhattan Corp.

The pull away from investment banking comes just days after ING Group said it would sell parts of its ING Barings investment banking business to ABN Amro Holdings NV but keep the asset management portions of the business.

“Asset management is low-risk, high-return,” which is why European banks are interested in that market, said James Alexander of Commerzbank Securities. The challenge, however, is negotiating a reasonable price.

Banks often overpay for asset management firms, but sometimes the opportunity is so good, they don’t mind doing so, he said.

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