Deutsche Bank eyes overseas markets for retail growth

FRANKFURT Fri Nov 16, 2012 6:37am EST

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FRANKFURT Nov 16 (Reuters) - Deutsche Bank's retail banking chief is focussing on overseas expansion and a renewed emphasis on measuring what clients earned as a way to regain traction in an industry where client trust has been damaged by the financial crisis.

Rainer Neske, head of private and business clients, a division which boasts 28 million clients in Germany, Spain, Italy, China and India, said the crisis has brought a renewed focus on tapping into strongly growing market abroad.

"A stagnating population threatens growth opportunities in the long run. That's why retail business in emerging markets is of great significance," Neske said at an event hosted by Reuters in Frankfurt.

Since 2007, Germany's biggest lender has increased the number of clients in Italy, Spain, Portugal, Belgium and Poland from four to five million, while doubling customer deposits and raising loans by 35 percent.

Deutsche has also built a retail business in India and China as a way to position itself for growth as its German business faces limited room for expansion due to the stagnating population.

Neske said his division was now primarily focussed on organic growth, rather than on expanding through further acquisitions. Deutsche Bank only recently bought Deutsche Postbank, Germany's largest retail bank by clients, and spent the past months working on integrating the lender formerly owned by Deutsche Post.

Neske said he has not been tempted to bid for individual retail branch offices that have been put up for sale by competitors in Italy, for example.

"I see this as a cleansing of the market," Neske said, adding that the efforts to integrate different branch networks rarely justify the price being asked for them.

At home it has changed the emphasis to focus on what clients earned, as well as measuring revenue growth for the bank itself.

"The crisis of trust is not just a phase which lasts two or three years. Client attitudes have changed fundamentally. The times of blind trust have forever disappeared," Neske said.

Neske further said he did not see a dramatic expansion of the German retail branch network.

The division targets a pretax profit of 3 billion euros ($3.84 billion) by 2015.

Germany's flagship lender does not have a strategic goal for maintaining a balance of revenues between the different divisions at Deutsche, which include asset and wealth management, investment banking, as well as retail banking, Neske said.

"We want each of the divisions to develop. But there is no strategic target for business balance," Neske said. ($1 = 0.7817 euros) (Reporting By Edward Taylor)

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