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Financials

UPDATE 1-Deutsche Boerse aims for top with integrated business model

* Group to focus on revenue growth while watching costs

* Share rises 5.4 percent, biggest gainer on Dax index (Adds CEO, analyst comment, shares)

FRANKFURT, Feb 18 (Reuters) - Deutsche Boerse has set its sights on becoming one of the top two global players in its main business areas, profiting from better integration of its trading, clearing and settlement activities, the exchange operator’s CEO said on Thursday.

The German company, which announced a bigger than expected dividend increase after Wednesday’s full-year results came in close to expectations, faces stiff competition for increased market share in its major operations.

Rivals include CME and ICE in derivatives, while DTCC and Euroclear operate in post-trade settlement services where Deutsche Boerse’s Clearstream business is active.

“We are determined to be ranked number one or two globally. In derivatives trading were are around number three,” said Carsten Kengeter, who has been revamping the business since taking the helm last June.

The group would continue to focus on revenue growth while clamping down on costs, counting both on organic growth and acquisitions to achieve its aims, Kengeter added.

“What we have to prove to the markets is that our integrated business model generates added value that is also reflected in our market capitalisation,” Kengeter said.

Deutsche Boerse’s market cap of $15 billion is about half that of CME.

Barclays analysts said that Deutsche Boerse’s revenue growth opportunities are strong in the medium term, including clearing, collateral management and settlement.

Warburg analysts took a similar view.

“All growth initiatives are on track and should help to achieve the target for net revenue of 2.8 billion euros ($3.1 billion) to 3.2 billion euros in 2018,” they said.

Deutsche Boerse had raised its dividend by 7 percent to 2.25 euros per share for 2015.

The company’s share price rose 5.4 percent to 76.95 euros by 1315 GMT, making it the biggest gainer on the blue-chip Dax index, which was up 1.5 percent. ($1 = 0.9017 euros) (Reporting by Jonathan Gould and Andreas Kroener; Editing by Caroline Copley and David Goodman)

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