Deutsche Bank, Germany's biggest bank, reported Tuesday the performance in its history with net profit surging 29 percent to €2.121 billion ($2.9 billion).

The group's key investment banking business was mainly responsible for Deutsche Bank’s record quarterly earnings of €2.2 billion, the equivalent of a 10 percent increase over the first three months of 2006, beating analysts’ expectation of about €1.8 billion.

"Deutsche Bank's outstanding first-quarter results are testimony to our powerful and well-diversified franchises in key areas," said Deutsche Bank chief Josef Ackermann releasing the results.

This report comes after the fierce bidding battle over ABN Amro, which hints towards the consolidation of the European finance and banking sector.

"Consolidation of our industry, including cross-border mergers in Europe, may also create changes in the competitive landscape," Ackermann wrote in a letter to shareholders accompanying the results.

"We believe Deutsche Bank is well equipped to deal with these factors as our strategic position is strong," he said.

"Our strategy remains concentrated on continuing organic growth and selective incremental acquisitions," he wrote.

Deutsche said group pre-tax profit jumped 22 percent to €3.163 billion while group revenue increased 20 percent to €9.576 billion.

Deutsche Bank shares declined 93 cents, or 0.8 percent, to €115.37 in Frankfurt, valuing the company at about €60.6 billion. The stock increased by 16 percent in the past year.