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FRANKFURT (AFP) - Deutsche Bank said on Monday that it planned to invest $1 billion each year in its online activities in order to take advantage of the brave new world of the Internet.
Deutsche Bank said that it would be teaming up with SAP, the biggest software maker in Europe, in a partnership that would allow the biggest bank in Germany to market financial services to companies through a virtual exchange on the Internet.
It also said that its retail banking unit, Deutsche Bank 24, was joining forces with AOL Europe - the online joint venture between America Online and Bertelsmann - to set up a joint platform for its brokerage and online banking products for private customers.
At a news conference detailing its new, grand e-commerce strategy, Deutsche Bank said that the Internet would affect the financial services sector more than any other. "In the next few years, the Internet will fundamentally change the face of the banking environment. We're taking up this revolutionary challenge, restructuring our business and cooperating with partners with the aim of harnessing the new opportunities in an optimal way," said Deutsche Bank chairman Rolf Breuer.
The Internet offered the highest degree of convenience for the customer, Breuer said. The World Wide Web offered customers direct access to the markets, extensive information and services such as Islam Online.
The tie-up with SAP would target corporate customers, the Deutsche Bank chairman explained. Deutsche Bank and SAP would build up joint market places using SAP Internet technology and business applications.
Deutsche Bank would make available financial products and other services to companies via these new marketplaces. The alliance would offer companies a platform for conducting business "fully electronically, securely, speedily and at a low-cost," Deutsche Bank said.
The deal with AOL Europe, on the other hand, would target private customers, particularly in the area of home banking. Only last week, Deutsche Bank's rival Commerzbank announced that its direct banking unit, Comdirect, was joining forces with T-Online, the Internet subsidiary of telecommunications giant Deutsche Telekom.
Deutsche Bank board member Hermann-Josef Lamberti said at a news conference that the biggest private German bank would create separate Internet platforms for a range of its banking operations. For example, a new personal finance portal called Moneyshelf.com would be available to the bank's private customers in Germany later this year with a European rollout planned later.
It would also create separate platforms for the capital and commercial markets sectors: "db marketplaces" for the trade of commodities and industrial goods such as steel, chemicals and plastics; and dbmarkets.com, an integrated web-based gateway to the trading platforms of the bank's global markets division.
Lamberti said that the Internet activities would be anchored firmly in Deutsche Bank's existing divisions with no parallel structures. Some of the projects, such as Moneyshelf.com, would be split off and incorporated under separate units, which might be sold off later or floated on the stock exchange, he added.
Finally, Deutsche Bank said that it planned to launch two funds of $150 million each to invest in Internet companies. The first fund, called e-millenium1, would invest in promising pre-market Internet companies in the United States and serve as a rollout facilitator for those companies in Germany and Europe. A sister fund for Asia, called e-millenium2, was to be launched in the middle of the year, the bank said.
Investors were enthusiastic about the plans. On the Frankfurt stock exchange, Deutsche Bank shares were showing a gain of $4.07, or 5.05%, at $84.62
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