Deutsche Bank AG said Thursday that its first-quarter profits will probably slip because of market volatility, but in the same breath chief executive Rolf E. Breuer laid out ambitious profit goals for the next two years.

At a press conference in Frankfurt, Mr. Breuer said through an interpreter that earnings in the current quarter will “hardly be able to compete” with the record year-earlier period, when Deutsche Bank’s net income was $1.4 billion.

However, Mr. Breuer also outlined plans for $885 billion-asset Deutsche Bank to increase its after-tax profits by at least 15% a year by 2003 and achieve an average return on equity of more than 15% a year. It said it will look to its two main units — the corporate and investment banking division and its private client and asset management businesses — to fuel that growth.

Alan Webborn, an analyst at Kelton International, said there is “no reason why those targets are not achievable.”

The projections came just eight weeks after the financial services giant consolidated five business units into two — product creation and product distribution — to improve cross-selling.

Damage inflicted by the flailing capital markets is evident in first-quarter reports already issued by other financial services companies, namely Lehman Brothers, Morgan Stanley Dean Witter, and Goldman Sachs Group Inc.

“We … assume that, thanks to our good strategic positioning, we shall do better than the competition,” Mr. Breuer said.

What most analysts found more interesting was Deutsche Bank’s saying it intends to continue pursuing talks with Allianz Holding AG to form a cross-sales partnership — even though the German insurer is negotiating to buy Deutsche Bank competitor Dresdner Bank AG, which agreed to merge with Deutsche last year in a deal that ultimately collapsed.

“I would be very surprised” if Deutsche Bank and Allianz given Allianz’s discussions with Dresdner, said Evangelos Kavouriadis, an analyst at Sanford C. Bernstein & Co. “I think Breuer said that just to help the stock price in the short term.”

The deal would be “a net negative” for Deutsche Bank, Mr. Kavouriadis said, because it “will have tougher competition at home.”

Deutsche Bank is aiming for yearly revenue growth of more than 5% for its investment banking and corporate customer business. It also seeks 10% revenue growth per year both from its private banking business, which manages $200 billion, and from its asset management business, which manages $600 billion.

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 including the former Chase Manhattan Corp.

Within the private client and asset management unit, Deutsche Bank plans to expand personal and institutional retirement services, wealth-accumulation services, and advisory services.

Mr. Breuer had indicated on Feb. 1 that his company might make private banking or asset management acquisitions in the United States but that it would probably make no further acquisitions in investment banking. Deutsche Bank bought Bankers Trust Corp. in 1999.

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