US Property Set To Recover In H2: Deutsche CEO

Source : The Business Times, May 19, 2008

(ZURICH) The end of the credit crisis is getting closer and the US real estate market should recover in the second half of the year, Deutsche Bank chief executive Josef Ackermann said.

'I think that we are getting closer to the end of the financial crisis,' Mr Ackermann told the Swiss Sunday newspaper Sonntagsblick. 'It is not fully over yet, but the signs from the United States are encouraging.' He said that the pragmatic approach in the US to resolve the crisis should start to pay off soon. 'We should feel the effects in the second half of the year already and see a strong recovery of the US real estate market,' he said.

The fallout from US households' defaulting on home payments triggered the global crisis, leading to a squeeze in credit markets in Europe and the US as banks stopped lending for fear of being exposed to the sub-prime problems.

Mr Ackermann urged banks to draw lessons from the crisis quickly. 'I am worried that otherwise governments will step up regulations in a way that are harmful to our sector.'

In a separate interview with Germany's Frankfurter Allgemeine Sonntagszeitung, he said Deutsche was sticking to its target of making a pre-tax return on equity of 25 per cent over the business cycle. 'That is our goal. Even in 2007, half of which was a time of crisis, we made 26 per cent. Geograhically and with our broad range of products we are positioned outstandingly for the megatrends.'

Asked about possible acquisitions, he said: 'We do not feel pressured to act. We don't have to buy anything, so we are strong enough. We are among the best in the world in the areas where we do business, but of course that does not mean that we will let a good buying opportunity pass us by.' Deutsche Bank has flagged its interest in the German retail banking operations being put on the block by Citicorp and in Deutsche Postbank, which Deutsche Post is in the process of selling. -- Reuters