BONN -- Alfred Herrhausen, the head of West Germany's largest bank and one of the most powerful men in Europe, was killed in a bomb attack Thursday while he was en route to his office in Frankfurt.

The office of the chief federal prosecutor said that the Red Army Faction, a terrorist organization, had claimed responsibility for the attack in a letter left at the scene.

The blast that killed Herrhausen destroyed his armored BMW limousine and was heard as far as three miles away from Bad Homburg, a Frankfurt suburb where Herrhausen lived. His driver was severely injured.

The 59-year-old executive, a personal friend of Chancellor Helmut Kohl and an economic adviser to Kohl's government, was on his way to his office at the Frankfurt headquarters of the Deutsche Bank, of which he was chief executive.

Kohl, when informed of the killing, denounced it as a "cowardly and brutal murder." He described Herrhausen as a friend and patriot.

"Whoever knew him," Kohl said, "knows he was an outstanding businessman, an important banker and one of the most important spokesmen for the German economy around the world."

Foreign Minister Hans-Dietrich Genscher said Herrhausen had been "an eminent representative of responsible social and political policies in West Germany" and that he had "made a great contribution to aid programs for Third World countries."

In Rome, a spokesman for Prime Minister Giulio Andreotti, who was meeting with Soviet President Mikhail S. Gorbachev, said "the prime minister and President Gorbachev expressed their regret at Herrhausen's death."

Herrhausen had strong ties to the Soviet Union and had recently made it clear that his bank was prepared to expand toward the East as a result of the decline in Communist power there.

On Monday he had flown to London to complete arrangements for the Deutsche Bank to take over the British merchant bank Morgan Grenfell, a move designed to expand the West German bank's role in Europe.

But his status as West Germany's No. 1 banker had drawn criticism from people who said they feared the power of the banks, and particularly that of the Deutsche Bank because of the latter's interests in many important private companies, including key industrial enterprises.

The Deutsche Bank recently pressed for a merger between the auto maker Daimler-Benz AG, of which the bank is a major shareholder, and the aerospace concern Messerschmitt-Boelkow-Blohm (MBB). This role helped make Herrhausen a potential target for terrorists.

"Anything related to weapons," a fellow banker said Thursday, "is seen by the general public as immoral."

Heribert Hellenbroich, former head of West German counterintelligence, suggested that Herrhausen's part in the Daimler-Benz-MBB arms industry merger could have drawn terrorist attention to him.

Moreover, for the extreme left wing, the largest West German bank and its chief executive were a symbol of the hated capitalist system.

"He (Herrhausen) is an unusual phenomenon in terms of what one expects from the chairman of Deutsche Bank," the liberal weekly Die Zeit once commented. "He does not act like a traditional banker, but instead more like a captain of industry who by sheer force wants to transform his institution into a company with 'international identity' active in all areas of finance."

Besides the bank's industrial holdings in 1,700 West German and 200 foreign firms, Deutsche Bank under Herrhausen recently began moving into such new financial areas as insurance and mortgage banking.

The bombing attack occurred just after 8:30 a.m., about 500 yards from Herrhausen's heavily guarded residence in Bad Homburg, a fashionable spa. As Herrhausen's BMW moved along, followed by a vehicle carrying security personnel, an explosive device was detonated, apparently by remote control.

The car was thrown into the air. Its doors, hood and trunk flew open, and its windows were shattered. The force of the explosion knocked out the windows of homes and other buildings in a wide area.