Deutsche Bank AG's strategy in the United States is unlikely to shift from a focus on internally generated growth in 2002, but the company could see itself returning to the acquisition market - if the right opportunity in asset management came along.
Josef Ackermann, the head of Deutsche's investment banking business, spoke Monday at an investment conference in New York hosted by UBS Warburg and told Wall Street that the German banking giant has no interest in a commercial banking deal but would certainly consider asset management acquisitions in the future.
Combined with recent comments by chairman Rolf. E. Breuer - whom Mr. Ackermann will succeed in 2002 - that implied Mr. Breuer is interested in a U.S. money management firm, the presentation put a finer point on the approach Deutsche is likely to take as it seeks to expand in markets outside Germany.
When asked about the Frankfurt banking company's plans, Mr. Ackermann said, "I have no intention to buy a commercial bank." Deutsche is also not focused on purchasing another U.S. investment bank (its deal for Bankers Trust Corp. closed in June 1999), he said, nor is it scouting out an insurance company in Europe to compete with the plans of its rival, Dresdner Bank AG, to merge with the German insurer Allianz Holdings.
"We want to grow organically, especially in the U.S.," Mr. Ackermann said. But he added that Deutsche Bank would buy an asset management company if the opportunity presented itself.
Analysts have said that a purchase on this side of the Atlantic is more likely, given the dearth of independent money management firms in Europe. But buying a retail banking company in the United States would not complement the ongoing restructuring at Deutsche, observers said.
Konrad Becker, an analyst with Merck Fink & Co. in Munich, agreed that because of the scarcity of firms in Europe, the best asset management deals for financial institutions there are in the United States. Other European banks have already made inroads here. Most recently, French banking giant Societe Generale announced a deal to buy a majority stake in TCW Group, an $80 billion-asset management company in Los Angeles.
Deutsche had about $920 billion of assets under management and administration at the end of last year, making it sixth among the global financial institutions managing assets. Citigroup Inc., with more than $1.3 trillion under management and administration, was the largest, according to data from Deutsche.
"We are the best-positioned bank in Europe in asset management," Mr. Ackermann said during his presentation Monday. "We have the advantage of scale and distribution networks."
Deutsche has changed course from a year ago, when it worked out plans to exit retail banking in a proposed merger with Dresdner that fell apart. Now it has put more value on a branch structure, especially for boosting its private banking and asset-gathering, he said.
Though the new strategy could include the takeover of a commercial bank in Europe, retail exposure in the United States would not make sense for the company, Mr. Becker of Merck Fink said. But without a U.S. retail presence it would lack a distribution network for asset management products, he said.
Mr. Ackermann said his company wants to eliminate weaknesses in the investment banking division but was not willing to pay goodwill and risk diluting its stock.
"We have a clear weakness in corporate finance," particularly the middle market, he said. The bank has plans in Europe to integrate middle-market business into the investment banking division, a model that would be used elsewhere in the world.
Mr. Ackermann also told investors that the bank has exited middle-market lending in Asia and South America because of recent financial crises in those regions. "Wherever there was a hot spot, Deutsche had some exposure," he said. But, he added, "that is no more."
Restructuring involves separating the bank into two major divisions: private client and investment banking. The private-client unit will combine retail and commercial banking as well as asset management; investment banking will include corporate finance, sales and trading, and transaction banking.
Mr. Ackermann gave no timetable for completing the restructuring but said that more branches in Germany will be closed.
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