This article is about Deutsche Bank AG, which six months ago tried to sell its retail business to concentrate on corporate and investment banking, is working on a plan to turn its retail unit into a pan-European outlet for stocks, mutual funds and other investment products.

Top executives of Deutsche Bank, the world's largest bank by assets, were to present their latest ideas to their supervisory board on 23/10/00. The board, the equivalent of a board of directors at U.S. companies, earlier this year said it wanted to weigh the management proposals before big steps were taken.

The new thinking is driven by the bank's powerful investment-banking division, known as Global Corporates & Institutions, or GCI, which sees the retail network as a distribution channel to the growing class of affluent Europeans who are switching their savings into stocks and investment funds.


The supervisory board had earlier told Mr. Breuer to rethink his previous plan to sell a majority stake in Deutsche Bank 24. The bank's top investment bankers now support retaining the retail business and hope to focus its efforts on selling investment products, rather than traditional banking services. Deutsche Bank's asset-management division, led by former investment banker Michael Philipp, is also pushing the retail revamping to boost the sales of fund-management unit DWS, Europe's biggest mutual-fund company.

Plans for improved distribution aren't confined to Deutsche Bank 24. The group's private-banking unit, which serves high net-worth clients, is also due for aggressive expansion as a European sales channel for the GCI and asset-management units. In the U.S., too, Deutsche Bank hopes to win retail customers, a strategy that it furthered by making a bid for National Discount Brokers Group Inc. earlier this month.

The supervisory board, while welcoming the plan to keep the retail bank, may resist too strong a shift away from basic retail banking, said people familiar with the board's thinking.

The outcome of meeting may be an understanding that leaves Deutsche Bank still entrenched in traditional domestic retail banking, as well as the retail investment services that excite its GCI bankers. "It's politically impossible for Deutsche Bank to get out of ordinary mass retail business in Germany," said a banker close to GCI's thinking. "You can't manage that base down; you can only make it as cost-efficient as possible."

In August, Deutsche Bank had budgeted only 130 million euros ($109.3 million) for building up Deutsche Bank 24 in Europe, including redesigning branches abroad, unifying information technology and marketing the new-look business, Tessen von Heydebreck, the top executive for retail banking, said at the time. Management consultants working for the bank have estimated it would cost about 300 million euros in marketing just to achieve basic brand recognition across Europe.

Now insiders say major investments are planned, including "a huge amount of funds" going into the development of a technological platform to win European customers via the Internet, the preferred channel for expansion in a strategy that hopes to avoid the high costs of branch networks.

Outside Germany, Deutsche Bank has 1.2 million retail customers in Italy and 600,000 in Spain, but a small retail presence in France and none in the United Kingdom.

"Everybody's targeting the mass affluent in Europe," J.P. Morgan analyst Stuart Graham said last week. "Where Deutsche Bank scores is that it has been on the ground in Spain and Italy for years." These two countries promised the strongest growth in retail investment products after Germany, said Mr. Graham. But France and Britain would prove difficult to crack, he said.

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