Deutsche prowls for buys after subprime escape

Deutsche Bank is on the prowl for acquisitions, its chief executive said, after it dodged the subprime disaster that hit rivals.

Germany's biggest bank stuck to its promise of no more subprime surprises with only small write-downs for the final three months of last year, though its core investment banking business struggled as investors went to ground.

One of the few to emerge unscathed from the crisis that clobbered Wall Street powerhouse Citigroup and Swiss rival UBS, Deutsche upped its dividend and said it was ready to swoop on smaller rivals.

Chief executive officer Josef Ackermann said he was interested in buying Germany's largest retail bank, Postbank, which comes with a market price tag of almost €10 billion.

He was also open to similar opportunities abroad, though he ruled out stricken French bank Société Générale.

"Would we (look at) other opportunites? If they were to come up, yes," he said in an interview with Reuters when asked about targets in Europe. "Postbank would add value in our private client business in Germany."

Mr Ackermann also stood by his "vision" of making a pre-tax profit of €8.4 billion this year - almost as good as the record €8.7 billion last year.

But he warned of tough times ahead for the global economy and capital markets. Further financial market ructions or a recession could throw the bank off track, he warned, though he did not expect either.

Deutsche's overall quarterly net profit of almost one billion euros was roughly half what it made a year earlier although slightly above what the market expected.

The motor of the group's business, investment banking, sputtered, with pre-tax profits in the final three months of the year of €447 million, down more than half as demand for debt products slowed.

But investors were pleased that Deutsche made write-downs of less than €50 million in leveraged finance and none linked to subprime assets in the final quarter of last year.

Having avoided the subprime storm, Mr Ackermann is now focused on how Deutsche's old money spinners can prosper post crash.

The Frankfurt-based bank has, for example, made record group profits on the back of its debt-trading and origination business.