Deutsche Bank regulators review supervisory board member

Bloomberg

German financial regulators are concerned about Deutsche Bank AG’s appointment of Juerg Zeltner to the supervisory board because his role as wealth management executive could pose conflicts of interest.
They worry that Zeltner’s job running KBL European Private Bankers SA is incompatible with his oversight role at Deutsche Bank, according to people briefed on the matter. If the bank can’t find ways to mitigate the conflict of interest, Zeltner could be forced to leave the board, they said, asking not to be identified in discussing ongoing deliberations.
One way to address the issue would be for Zeltner to give up his position at KBL, said one of the people.
Forcing a supervisory board member to quit would be highly unusual and raise questions about the nomination process. Zeltner represents the interests of the Qatari royal family, which owns KBL and is also Deutsche Bank’s biggest shareholder. His appointment came shortly after the German lender unveiled its biggest restructuring plan in recent history.
“All potential conflicts of interest that may result from his position and his relation to one of our large shareholders have been flagged to the supervisory board and the company,” a spokesman said by email. “The nomination committee has assessed them and considers them marginal.”
A representative for Zeltner declined to comment.
Rather than ousting Zeltner, it’s more likely that regulators end up imposing constraints on his role, such as requiring him to abstain from supervisory board votes where the conflict of interest is particularly significant, another person said. Other supervisory board members have faced such constraints before.
Norbert Winkeljohann, a former executive at the audit firm PricewaterhouseCoopers, last year recused himself from the discussions about hiring a new auditor for Deutsche Bank, according the lender’s annual report.
For Zeltner, a former UBS Group AG wealth management executive, the potential conflicts of interest could me more pervasive. He left the Swiss lender in January 2018 and shortly after was in touch with Deutsche Bank about a potential leadership role, but the talks didn’t go anywhere, people familiar with the matter have said.
After joining KBL this year, Zeltner is now running a business that competes for rich clients with firms including Deutsche Bank, where wealth management is one of the areas Chief Executive Officer Christian Sewing has prioritized for growth.
KBL is headquartered in Luxembourg and offers mostly private banking services through various subsidiaries across Europe, including in Germany through the subsidiary Merck Finck Privatbankiers AG.
The firm had 60 billion euros in assets under management at the end of last year, compared with 200 billion euros at Deutsche Bank’s wealth management unit.