* Q3 pretax profit 1.1 bln euros, in line with forecasts
* Net profit 755 mln euros, beats expectations
* Targets Basel 3 core tier 1 of at least 8 pct by 31 March
* Shares up 4 pct, outpace European bank stocks
(Adds comments from CFO, details on job cuts)
FRANKFURT, Oct 30 Deutsche Bank said
it hopes to benefit from Swiss rival UBS's retreat, as
its investment bank delivered record third-quarter revenue and
helped lift group profit by 20 percent.
Germany's largest bank increased its job loss target by
nearly 100 to 1,993 staff, part of an industry-wide retrenchment
as banks slash costs in a bid to increase returns as tougher
regulations squeeze margins.
But Deutsche Bank also said on Tuesday it would seek to mop
up business from UBS which is firing 10,000 bankers and winding
down its fixed-income operations, an area of strength for the
"We have told you that we anticipate that some competitors
will leave. That is traditionally what happens in these areas of
consolidation," Deutsche Bank Chief Financial Officer Stefan
Krause told analysts on Tuesday. "As a leader in fixed income, a
reduction in capacity is a good thing," Krause added.
For Deutsche Bank, revenue from sales and trading of debt
products, such as bonds and derivatives, jumped 67 percent, a
record level for the third quarter. That helped Deutsche's
Corporate Banking and Securities unit, the core of its
investment bank, deliver 662 million euros of the bank's total
1.13 billion euros in pretax profit.
Deutsche Bank shares were up 4 percent at 34.64 euros at
1108 GMT, outpacing European bank stocks which were 1
Christian Muschick, an analyst at Silvia Quandt research
said: "The development in investment banking is a positive
surprise. In many areas of investment banking Deutsche is in the
top three, and therefore in a better position than UBS."
A move by the European Central Bank to pacify markets at the
end of July helped fuel a boom in debt issuance, which benefited
banks with large fixed-income businesses like Deutsche and
rivals Nomura and Morgan Stanley.
Year-to-date, Deutsche Bank is in second place globally
among the bookrunners for global debt, behind J.P. Morgan
, Thomson Reuters data released on Oct. 25 show.
Retail banking contributed another 492 million euros to
Deutsche's pretax profit, helping to offset 276 million euros in
restructuring expenses and a 20 percent jump in loan loss
The bank unveiled an overhaul in September in a bid to save
4.5 billion euros by 2015. Around 40 percent of cost savings
will come from cuts to real estate and information technology.
CFO Krause said on Tuesday the majority of job cuts will be
completed by the year-end, adding that 1,200 of the total 1,500
job losses at the investment bank had already been completed.
The cuts represent about 15 percent of investment banking staff.
Deutsche is cutting about 2 percent of its total workforce.
Some 814 jobs are going within Corporate Banking & Securities,
and 562 from Asset and Wealth Management. A remaining 617 jobs
will be cut from infrastructure functions which were primarily
supporting Corporate Banking & Securities, Deutsche Bank said.
The bank has earmarked 222 million euros for termination
The bank improved its core tier one ratio to 10.7 percent,
mainly by shedding risky assets. At the end of the second
quarter the bank's core tier one ratio was 10.2 percent.
Deutsche Bank's third-quarter net income was stable at 755
million euros, beating a forecast 666 million in a Reuters poll
($1 = 0.7749 euros)
(Additional reporting by Andreas Kroener and Sarah White in
London; Editing by Erica Billingham)