By Aaron Kirchfeld and Jann Bettinga Feb. 4 (Bloomberg) -- Deutsche Bank AG, Germany’s biggest bank, posted its fourth straight quarterly profit on a rebound in trading, cementing a turnaround after reporting a record loss a year earlier. The Frankfurt-based bank had net income of 1.3 billion euros ($1.8 billion) in the fourth quarter after a loss of 4.8 billion euros in the year-earlier period, it said in a DGAP statement today. Earnings surpassed the 650 million-euro median estimate of analysts surveyed by Bloomberg. Deutsche Bank, like New York-based Goldman Sachs Group Inc. and JPMorgan Chase & Co., recorded a rebound in profit last year after emerging from the worst financial crisis since the Great Depression. Revenue from trading declined in the fourth quarter as business slowed before year-end and competition increased, shrinking margins. “Deutsche Bank is a relative winner of the crisis within the investment-banking world,” said Andrew Lynch, who helps manage about $2 billion at Schroder Investment Management in London, including Deutsche Bank shares. He spoke before the earnings were published. Deutsche Bank has gained 122 percent to 45.82 euros in Frankfurt trading over the last 12 months, compared with a 57 percent gain in the 52-company Bloomberg Europe Banks and Financial Services Index. Fourth-quarter net income reflected a tax benefit of 554 million euros, the company said. Acquisitions JPMorgan more than doubled earnings in 2009 to $11.7 billion, while profit at Goldman rose by more than five times to $13.4 billion. Deutsche Bank earned 5 billion euros in 2009. Deutsche Bank Chief Executive Officer Josef Ackermann, 61, is trying to reduce the company’s dependence on investment banking, which accounts for more than two-thirds of group profit, by making acquisitions. He agreed in October to buy Sal. Oppenheim Group, Germany’s biggest independent private bank, and ABN Amro Holding NV’s commercial-banking operations in the Netherlands. The bank also purchased a stake in German retail lender Deutsche Postbank AG and has an option to increase the holding. “The business model is still tilted toward investment banking, but you can’t turn a super tanker around on a dime,” said Lynch. Obama Impact Deutsche Bank said in December that pretax profit may reach a record 10 billion euros in 2011 as it boosts earnings at the corporate and investment bank, helped by market share gains, and expands in Asia. Pretax earnings at the investment bank may rise 50 percent from the level in 2007 to 6.3 billion euros in the same period, the company forecast. U.S. President Barack Obama last month surprised bankers by throwing his support behind a plan from former Federal Reserve Chairman Paul Volcker that would impose new rules on bank size and bar banks from owning or sponsoring hedge funds and private- equity funds, as well as engaging in so-called proprietary trading that’s not related to clients. Ackermann said last week at the World Economic Forum in Davos, Switzerland that Obama’s proposed financial industry regulations would have a “marginal impact” on Deutsche Bank because the German company has exited “the bulk” of activities targeted in the proposal. He also voiced opposition to breaking up large banks. “Deutsche Bank has done well in its peer group, but the problem is that the whole industry is under a lot of pressure from regulators,” said Schroder’s Lynch. “There’s an existential risk to the business model.” To contact the reporters on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net; Jann Bettinga in Frankfurt at jbettinga@bloomberg.net.

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