Deutsche Bank reports 2003 pre-tax profit of Euro 2.8 bln.

Deutsche Bank today released its results for the fourth quarter and full year 2003. The bank reported income before income tax of Euro 2.8 billion for 2003 compared to Euro 3.5 billion for 2002. Income before tax for 4Q2003 was Euro 676 million compared to Euro 237 million in 4Q2002.

Net income for 2003 more than tripled to Euro 1.4 billion compared with Euro 0.4 billion in 2002. The income tax expense was Euro 1.3 billion (2002: Euro 0.4 billion), excluding the reversal of 1999/2000 credits for tax rate changes. The increase in net income translates to a jump in earnings per share of 281 per cent to Euro 2.44.

The income before income taxes in 2003 masks a significant improvement in underlying pre-tax profit (see reconciliation table). In 2002, reported pre-tax profit of Euro 3.5 billion was boosted by non-underlying net gains of Euro 2.2 billion (gains on the sale of industrial holdings and businesses, net of charges for non-core assets).

Reported pre-tax profit of Euro 2.8 billion in 2003 included net charges of Euro 800 million from non-underlying items. Underlying pre-tax profit for 2003 was Euro 3.6 billion, up 163 per cent from 2002. Underlying pre-tax profit for 4Q2003 was Euro 662 million, up from Euro 147 million in 4Q2002.

Josef Ackermann, Chairman of the Group Executive Committee, said, “These results demonstrate the continuing success of our transformation strategy. Deutsche Bank has reached 2 new levels of operating strength; in terms of profitability, capital strength, and significantly lower risk. In a very challenging economic environment, we maintained the momentum of our business and cost reductions and made very strong progress in de-risking the bank. Our recommended dividend increase of 15 per cent to Euro 1.50 per share reflects our confidence that we will continue to meet aggressive growth targets in the next phase of our strategic agenda.”

Underlying revenues in 2003 were Euro 21.9 billion, nominally down four per cent compared to 2002 (Euro 22.8 billion). These figures partially reflect the strengthening of the euro, which impacts Deutsche Bank’s substantial dollar-based revenues, and the non-recurrence of revenues from businesses sold over the past year. Adjusted for these two effects, which amounted to Euro 2.7 billion, Deutsche Bank’s underlying revenues in 2003, on a like-for-like basis, were nine per cent higher than in 2002.

“Our transformation strategy provides a solid foundation for continued growth. We have set aggressive but realistic targets for phase two of our management agenda, and the strong competitive platform, combined with good revenue momentum, makes us confident we can achieve our goal of 25 per cent pre-tax return on equity,” said Ackermann. “The year 2004 has started very well, and we are confident that, if the world’s economies and financial markets continue to develop positively, our growth objectives are achievable,” Ackermann said.

Source: Deutsche Bank

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