Deutsche Bank defies recession: Profits advance by 20% for first four months

DEUTSCHE BANK'S group operating profits rose by more than 20 per cent in the first four months of 1993 from the same period last year, Hilmar Kopper, chief executive, said yesterday.

The strong performance from Germany's biggest bank provided further evidence of the sector's resilience in the face of the deep recession ravaging manufacturing industry.

'My colleagues and I are confident that the bank is strong and flexible enough, even in the difficult environment of 1993, to achieve a satisfactory result,' Mr Kopper told the annual meeting.

But he warned that recessionary conditions would require loan loss provisions on a scale similar to the DM2.6bn ( pounds 1.05m) made last year. 'The economic crisis in Germany is actually worse than many feared, including ourselves,' said Mr Kopper, who felt the economy could shrink by 2 per cent this year.

'We are caught up in a necessary process of structural change. It is certainly far-reaching. There will be no change for the better in the short term.'

Underlining his optimism, Mr Kopper said the bank was considering an increase in its 1993 dividend, having paid an unchanged DM15 last year. 'If our profits after tax permit, we will be obliged to consider a dividend increase,' he said.

Despite the problems, Deutsche was not pessimistic because the German economy was 'basically healthy'.

But Mr Kopper launched a devastating criticism of excessive state intervention in what he described as 'our somewhat ageing market economy'.

With a state share of more than 51 per cent of GNP, up from 45 per cent in 1989, very high taxes and a jungle of state regulations, private initiative and private responsibility as well as entrepreneurial activity were being crowded out, he said.

'It is time to stand up for freedom,' he added. 'We need more market and less state, a situation which in the Fifties and Sixties was the basis for the prosperity we take for granted today.'