Nov. 6 (Bloomberg) -- Deutsche Bank AG Chief Executive Officer Josef Ackermann announced to employees a strategy aimed at boosting profitability at the corporate and investment bank and increasing revenue in Asia.

The Frankfurt-based company also aims to strengthen consumer banking and asset and wealth management, including extending “market leadership” in Germany and lowering costs as a percentage of revenue, Ackermann said in a letter to staff that was obtained by Bloomberg News and confirmed by spokesman Michael Golden.

Ackermann, who sidestepped the worst of the credit crunch, said the “fourth chapter” in the company’s so-called management agenda, started in 2002, will help Deutsche Bank profit in the post-crisis world. The letter, dated Oct. 28, was published after senior executives met for this year’s management conference in Washington.

“Deutsche Bank has shown great resilience through this crisis and emerged as a relative winner,” Ackermann, 61, said in the letter. “We all can and should be proud of this, but now we have to move on, adapt to new challenges and profit from the opportunities of a new era.”

Deutsche Bank advanced 63 cents, or 1.3 percent, to 48.65 euros by 2:28 p.m. in Frankfurt trading. The stock is up 73 percent so far this year, outpacing a 42 percent gain in the 63- company Bloomberg Europe Banks and Financial Services Index.

The corporate and investment bank, which includes the securities unit and transaction banking, will seek “increased profitability and earnings quality,” while applying “even stricter risk and balance sheet discipline,” Ackermann said.

Investment Bank

The unit, run by Anshu Jain and Michael Cohrs, generated 3.74 billion euros ($5.56 billion) in pretax profit in the first nine months of the year, or 84 percent of group earnings, helped by record revenue from selling and trading stocks and bonds. Net revenue totaled 15.3 billion euros in the period, or 68 percent of the total.

The global markets unit, overseen by Jain, plans to strengthen equity, commodity and electronic trading, the letter said. Deutsche Bank also aims to be in the top five worldwide in corporate finance, it said.

The transaction banking unit, which includes trade finance, cash management and trust and securities services, will increase profitability internally as well as through “the right” acquisitions, such as the Oct. 20 agreement to buy ABN Amro Holding NV’s commercial-banking operations in the Netherlands, Ackermann said.

Asia Expansion

In Asia, Deutsche Bank plans to invest over the next two years to expand the corporate and investment bank and transaction banking, Ackermann said. The bank also aims to double the size of private wealth management, he wrote.

The share of total net revenue generated in Asia Pacific increased to 16 percent in 2008 from 11 percent in 2006, according to the annual report. The private clients and asset management unit, which includes private banking, generated revenue of 471 million euros in 2008 in Asia Pacific.

Deutsche Bank has lured bankers in the region away from competitors including Merrill Lynch & Co., and in May named Robert Rankin, former head of investment banking for Asia- Pacific at UBS AG, as CEO for the region, excluding Japan. Rankin will oversee about 17,500 employees in 16 countries, the bank said at the time.

“Asia has become a key driver of revenue growth in our industry,” Ackermann said. “Deutsche Bank is well positioned to profit from this.”

Leader in Germany

The CEO pledged to “focus on core business and improve efficiency” in consumer banking and asset and wealth management, which Ackermann has been expanding to cut reliance on investment banking. The bank agreed to buy Sal. Oppenheim Group, Germany’s biggest independent private bank, and a stake in retail lender Deutsche Postbank AG earlier this year.

He said the asset management industry faces “strong headwinds.”

The fourth part of the new strategy is to improve “top- line efficiency” across the company, Ackermann said. While costs relative to income fell after the management agenda was started in 2002, they have “crept up” again since 2005, he said. Deutsche Bank must “re-focus on costs and infrastructure efficiency,” he said.

Deutsche Bank’s compensation policy needs to maximize the performance of every employee and be “totally aligned” to “sustainable profitability, risk and capital adequacy,” Ackermann said.

Deutsche Bank may outline the strategy at an investors’ day with analysts on Dec. 14 and Dec. 15 in Frankfurt, the first such event in three years. The new strategy comes about six months after the bank extended Ackermann’s contract by three years to 2013.

“This strategy comes with ambitious financial goals across a range of metrics aimed at growing total shareholder return,” Ackermann said, without providing concrete targets.

To contact the reporters on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net

Last Updated: November 6, 2009 08:37 EST