Deutsche faces fresh ire a year after shakeup

Bloomberg

Deutsche Bank AG investors expressed their frustration with management at the company’s annual meeting a year ago. Weeks later, co-Chief Executive Officer Anshu Jain was gone.
Now it’s Chairman Paul Achleitner and Jain’s replacement, John Cryan, who are set to feel the displeasure of shareholders when they gather in Frankfurt on Thursday. With revenue plunging and the need for capital mounting, some investors worry it may be just a matter of time of before they’re asked to stump up and buy new stock.
“The mood’s going to be bad, maybe even worse than at last year’s meeting,” said Klaus Nieding, vice president of DSW, a German firm that advises shareholders on company proposals.
Deutsche Bank shares dropped by more than half in the past year — erasing about 20 billion euros ($22.6 billion) in market value — as plans to bolster capital and slash costs failed to revive confidence and profits shriveled across the industry. For Achleitner, a supervisory board dispute in April raised questions about his commitment to rooting out misconduct at Germany’s largest bank. Jain, 53, resigned in June after he and co-CEO Juergen Fitschen received the lowest approval rating in at least a decade in a vote at last year’s annual meeting. Fitschen, 67, will stand down on Thursday, leaving Cryan as sole CEO. Achleitner, 59, and Cryan, 55, declined to comment for this story through a spokesman.
Cryan, a British citizen who chaired the audit committee of the supervisory board before becoming co-CEO, has been outspoken about the company’s shortcomings, criticizing excessive pay, spiraling legal costs and outdated technology.
He suspended the dividend to bolster capital and pledged to shed about 9,000 jobs, or almost 10 percent of the workforce, and shrink the investment bank by scaling back the debt-trading empire built by Jain. While some investors applauded the cost reductions as long overdue, others expressed concern the cutting would eat too deeply into sales, especially during a trading slump.
Debt-trading revenue, Deutsche Bank’s largest source of income, fell 29 percent in the first quarter from a year before, while net income dropped 61 percent. Cryan told analysts last month that his efforts to overhaul the company and settle outstanding legal matters may lead to a second straight annual loss. “The issue that we have is that we want to get an awful lot done this year,” he said. An official at a top-20 Deutsche Bank shareholder said his firm backs Cryan, but questions whether he can turn the bank around given the weaker revenue picture.

and a potentially demoralized staff. A fund manager at one of the lender’s 10 largest investors said he was disappointed by previous attempts to push down costs and wants to see Cryan make progress on that front. Both asked for anonymity because they’re not authorized to speak publicly.