Frankfurt: Deutsche Bank AG’s head of consumer banking said Germany’s biggest bank will invest in emerging markets such as India and China to tap strong economic growth.
“We are investing in the internationalization,” Deutsche Bank’s Rainer Neske told a banking conference in Mainz, Germany, on 28 March. He compared emerging-market growth trends to earlier developments in eastern Europe.
Deutsche Bank aims to expand consumer banking and money management to help increase its pre-tax profit, excluding non-recurring gains or costs, to 8.4 billion euros (Rs48,720 crore) in 2008. The bank opened eight branches in India and began selling credit cards there. It also opened two branches in China and bought a 14% stake in Huaxia Bank with Sal. Oppenheim Jr. & Cie.
“It’s the right strategy to expand in countries where economic growth is the dominant story,” said Dirk Becker, an analyst at Kepler Equities in Frankfurt, who recommends investors buy the stock.
Deutsche Bank is also looking at other new markets, Neske said. There are many “interesting markets”, he added without naming any specific countries. In February, the bank agreed to buy 20% of Vietnamese finance company Hanoi Building Commercial Joint Stock Bank for an undisclosed amount.
“The growth we’ve achieved in India with so few branches shows how dynamic the market there is,” Neske said. The bank had 160,000 bank and credit-card customers in the country at the end of last year, he added.
Deutsche Bank plans to invest in its branch network in European markets such as Italy, where it plans to start a “second wave” of branch expansion. The German bank now has more than 1,400 branches in Europe. Neske declined to say how many branches the bank aims to open in China and India.
Shares of Deutsche Bank declined 0.4% to 98.66 euros at 12:04pm in Frankfurt. The stock has gained 4% in the last six months, giving the bank a market value of 51.8 billion euros.