June 26 (Bloomberg) -- Deutsche Bank AG, Germany’s biggest bank, gained in Frankfurt trading after UBS AG raised its rating and earnings estimates for the company, citing improving fixed- income and equities markets.

Deutsche Bank rose as much as 5.3 percent to 45.37 euros ($63.59) and was trading at 44.63 euros by 10:16 a.m. local time. The stock advanced 61 percent this year, compared with a 14 percent gain in the Bloomberg Europe Banks and Financial Services Index.

The Frankfurt-based bank was raised to “buy” from “neutral” by UBS analysts led by Philipp Zieschang, according to a note to investors today. The Swiss bank also increased its 2009 earnings per share forecast 59 percent to 6.28 euros and 2010 forecast 2.8 percent to 5.93 euros a share.

The fixed-income “bull market has broadened” in the second quarter and the “recovery in equities and M&A should help,” Zieschang wrote. “Deutsche Bank appears to have time to build its capital organically,” because it’s the most profitable and best-capitalized large German bank and isn’t under pressure from financial regulator BaFin, he said.

Deutsche Bank, scheduled to announce second-quarter earnings on July 29, returned to profit in the first quarter on a trading rebound after its first annual loss in more than 50 years in 2008. UBS, the European bank with the biggest losses from the credit crisis, said late yesterday it raised about 3.8 billion Swiss francs ($3.5 billion) by selling shares to boost capital and said it expects a second-quarter loss.

Credit Suisse analysts led by Daniel Davies also today raised the target price for Deutsche Bank’s stock 20 percent to 36 euros, forecasting “continued strong revenues” in investment banking and “less of a drag” from the retail businesses in the second quarter.

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

Last Updated: June 26, 2009 04:31 EDT