DEUTSCHE BANK said it hopes to benefit from Swiss rival UBS’s retreat, as its investment bank delivered record third-quarter revenue and helped lift group profit by 20 per cent.

Germany’s largest bank increased its job loss target by nearly 100 to 1,993 staff, part of an industry-wide retrenchment as banks slash costs in a bid to increase returns as tougher regulations squeeze margins.

But Deutsche Bank also said yesterday it would seek to mop up business from UBS which is firing 10,000 bankers and winding down its fixed-income operations, an area of strength for the Frankfurt-based lender.

“We have told you that we anticipate that some competitors will leave. That is traditionally what happens in these areas of consolidation,” Deutsche Bank Chief Financial Officer Stefan Krause told analysts. “As a leader in fixed income, a reduction in capacity is a good thing,” added Mr Krause.

For Deutsche Bank, revenue from sales and trading of debt products, such as bonds and derivatives, jumped 67 per cent, a record level for the third quarter. That helped Deutsche’s Corporate Banking and Securities unit, the core of its investment bank, deliver €662 million of the bank’s total 1.13 billion in pretax profit.

Deutsche Bank shares were up 4 per cent at €34.64 euros in early morning trading.

Christian Muschick, an analyst at Silvia Quandt research said: “The development in investment banking is a positive surprise. In many areas of investment banking Deutsche is in the top three, and therefore in a better position than UBS.”

A move by the European Central Bank to pacify markets at the end of July helped fuel a boom in debt issuance, which benefited banks with large fixed-income businesses like Deutsche and rivals Nomura and Morgan Stanley.

Deutsche is in second place globally among the bookrunners for global debt, behind JP Morgan.

Retail banking contributed another €492 million to Deutsche’s pretax profit, helping to offset €276 million in restructuring expenses. The bank unveiled an overhaul in September in a bid to save €4.5 billion by 2015. About 40 per cent of savings will come from cuts to real estate and IT. – (Reuters)