Alex. Brown parent gains

Accounting change, trades yield 7% profit for Deutsche Bank

May 04, 2001|By Bill Atkinson | Bill Atkinson,SUN STAFF

Deutsche Bank AG, the parent of Baltimore-based Deutsche Banc Alex. Brown, said yesterday that profit increased 7 percent in the first quarter, spurred by an accounting change and higher profit from its trading business.

Excluding the accounting change, profit in the quarter fell 17 percent from the prior year, according to Bloomberg and Reuters wire services.

The profit of the Frankfurt bank, Europe's largest, was 1.03 billion euros ($913 million) in the quarter that ended March 31.

Profit was boosted by Deutsche Bank's trading operation, which made 2.7 billion euros ($2.44 billion), and was up 10.7 percent from the corresponding period a year earlier.

"In this difficult environment, we again demonstrated our stable and strong earning power," chief executive Rolf-E. Breuer wrote in a letter to shareholders. "Compared with our international competitors, we turned in an excellent performance."

Shares of Deutsche Bank closed yesterday at 89.52 euros ($79.65), down 68 cents.

Many of Deutsche Bank's large U.S. competitors have struggled in this tougher stock market, including Morgan Stanley Dean Witter & Co., J. P. Morgan Chase & Co. and Merrill Lynch & Co. Inc., which have experienced double-digit declines in profit in the first quarter compared with last year.

Deutsche Bank also has felt the pressure. Its corporate and investment bank revenue was flat at 4.99 billion euros ($4.4 billion), compared with 5.0 billion euros in the 2000 quarter. And revenue generated from private clients and asset management was 2 billion euros, ($1.8 billion), down from 2.1 billion euros a year earlier.

Deutsche Bank employs about 1,400 people in Baltimore who work at Deutsche Banc Alex. Brown.

Alex. Brown Inc., whose roots in Baltimore date to 1800, was acquired by Bankers Trust Corp. in September 1997 for about $2.5 billion. Deutsche Bank then bought Bankers Trust, including Alex. Brown, in June 1999 for $9 billion.

Breuer indicated in his letter that the company will continue looking for acquisitions.

"We want to expand our market position in all important areas of business in the current financial year," he wrote. "We expect from this an improvement in our profit situation compared with our competition."

Bloomberg News and Reuters contributed to this article.

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