DaimlerChrysler merger helps quadruple profits at Deutsche

Deutsche Bank - Germany's largest - delivered a welcome surprise after it revealed preliminary 1998 pretax profit had almost quadrupled to 7.9 billion deutschemarks (about HK$35.34 billion).

The sharper than expected rise was boosted by a 3.2 billion mark special dividend it earned when Daimler-Benz, in which it has a key shareholding, merged with Chrysler last year to form DaimlerChrysler.

In a brief statement customarily released early before the group presents its complete financial statements next month, Deutsche said its operating profit - excluding the Daimler special dividend and technology costs related to the introduction of the euro and the millennium bug - had reached 4.3 billion marks, unchanged from the previous year.

'All provisioning has been made for credit and country risks fully taking into consideration the changed international risk situation,' the bank said.

It said the value of its total assets had been unchanged from the 1.2 trillion marks reported in the middle of last year and that it had expanded the amount of outstanding credit to 485 billion marks.

The results boosted Deutsche's shares, jumping in early trading yesterday, and came as a relief after sentiment on Deutsche had become increasingly subdued while the bank struggled to reach an agreement on Holocaust settlement claims.

This week, however, it finally agreed to join a group of other German companies to set up an estimated three billion mark fund to compensate for their role in the atrocities committed against Jews during the Holocaust.