FRANKFURT - Deutsche Bank AG, Europe's largest lender, is planning the fourth reorganization of its consumer banking unit in three years as it struggles to boost profits.
The company already has taken steps to shut 500 branches and cut 6,060 jobs in Germany. Now it will focus on marketing the Deutsche name, rather than using separate brands to add customers in its home market, analysts said.
To further reduce costs, Deutsche plans to move small corporate clients and some wealthy individuals to the consumer banking operation, which will offer fewer and more standardized products than other units.
Herbert Walter, a member of Deutsche's executive committee, is expected to outline the details today. Ronald Weichert, a company spokesman, would not give more details.
"The question is: Can this business be profitable in its own right?" said Derek Chambers, an analyst at HSBC Holdings PLC, who recommends that clients "add" Deutsche shares. "That's difficult given the current environment in Germany."
Josef Ackermann, Deutsche's chief executive, is facing a German market dominated by state-owned savings banks. The company has a 6% share of the home market and about 12 million clients across Europe.
At a banking conference last week Mr. Ackermann said that he wants the consumer banking unit to generate more than $980 million of annual profits within a year to 18 months. Excluding one-time costs, the unit generated $123 million of earnings in the first half, after posting a $35 million loss in the same period last year.
In September 1999 the company combined its Internet and branch banking businesses, and set up Deutsche Bank 24 as an independent unit. In January 2000 it started closing branches and said it would use the Internet to gain more clients.
A year later the company revamped its entire structure and combined consumer banking, private banking, and asset management into one unit called PCAM. Rolf Breuer, Deutsche's former chief executive, estimated that the unit's earnings would increase by 30% a year.
Now the company is removing the red, half-circled "24" from its bank branches. It is also tying its Maxblue online brokerage closer to the newly enlarged consumer and small-business banking unit.
Deutsche said last month that the steps are designed to help it boost earnings from consumer and private banking for wealthy clients by $635 million.
"Our profitability numbers are still not where we want to have them," Mr. Ackermann told reporters Aug. 1. "The answer can only be to get costs and revenue better in line with each other."
However, Mr. Ackermann said last month said that it would not slash any more jobs in Germany for the next 16 months.
Deutsche Bank spent $790 for every $9,756 it earned in consumer banking in the second quarter, according to Bloomberg's calculations. That compares with $459 at Citibank Privatkunden AG, the German subsidiary of Citigroup Inc.
