Deutsche Bank supervisor: Achleitner’s farewell with self-criticism

Rags often flew at the general meetings of Deutsche Bank. This time, surprisingly conciliatory tones were struck when the long-time chairman of the supervisory board, Paul Achleitner, said goodbye.

While it was at previous AGMs often met with criticism, this time there was even applause for the outgoing Chief Controller of Deutsche Bank, Paul Achleitner. The 65-year-old Austrian did not mince his words. In his speech he recalled when he took office ten years ago. At that time, trust in the bank had already been damaged. In addition, the bankers overestimated themselves, said Achleitner. “The inflated self-image stood in the way of the change that was so urgently needed,” he said.

Years of scandals and litigation

In the Achleitner era, one scandal after another came to light: be it dubious mortgage transactions, interest rate manipulation or allegations of money laundering. The bank was always involved in new legal disputes, for which it sometimes had to pay horrendous fines or agreed on expensive settlements. A total of around 18 billion euros were due. In the meantime, financial experts even feared that the high penalties could put Germany’s largest private financial institution into trouble.

“I made mistakes too,” Achleitner admitted. But the bank has been put back on the right track in these ten years. The bankers first sounded out a merger with Commerzbank in 2019, but rejected the plans. Then came a far-reaching restructuring of the company, in which thousands of jobs were lost. There were severe cuts in investment banking in particular, where most of the legal problems originated.

Return to billions in profits

Nevertheless, the trimmed business division remains the bank’s most important source of money and has recently been bubbling up properly. After years of losses in the billions, the money house was able to achieve a profit in the billions again last year: the bottom line was 1.9 billion euros.

Bank boss Christian Sewing wants to let the shareholders participate in this success. “We propose a dividend of 20 cents per share for the past fiscal year 2021,” said Sewing. In the two years before that, the shareholders had gone away empty-handed.

Hardly any criticism of Achleitner because of the scandals

Despite the recent positive development, the CEO sees further need for action, for example in the fight against financial crime. Just under a month ago, the bank was raided again in connection with reports of suspected money laundering that the institute had submitted. According to the public prosecutor’s office in Frankfurt, the investigation is currently underway.

Chief controller Achleitner is hardly held responsible for the scandals at the general meeting. Shareholder protector Klaus Nieding only criticizes the fact that the supervisor has changed the heads of the bank several times during his time, but has waited too long with some personnel decisions. “At Anshu Jain or John Cryan you held on for too long,” says Nieding, Vice President of the German Association for the Protection of Securities.

Union Investment reprimands share price loss in the Achleitner era

The criticism from major shareholder Union Investment is harder. Fund manager Alexandra Annecke portrays Achleitner as a value destroyer. During his tenure, the share price fell massively. Even if you include the dividend, shareholders would have lost more than half of their invested money over the period.

Wynaendt’s rise to the chairman of the supervisory board is expected

Achleitner’s successor, Alexander Wynaendts, accuses Annecke of holding too many offices. Among other things, the Dutchman is still on the supervisory board of Air France KLM and Citigroup.

Despite this, Wynaendts was elected to the board of directors. At the virtual meeting, the former head of the Dutch insurer Aegon received a majority of 97.84 percent to enter the committee. The election to the position of Chairman of the Supervisory Board is now only a matter of form.

There was again praise for the recent positive development of the bank. However, Markus Kienle from the Protection Association of Investors noted: “There is no acid test as to whether this development is sustainable.”

Climate activists also called for more sustainability. The morning before the general meeting, they had set up washing machines in front of the bank’s headquarters, and green foam was pouring out of them. Her accusation: The bank is greenwashing and still financing companies that would benefit from fossil fuels such as coal, oil and gas.

Allegations that are incomprehensible from the bank’s point of view. There it says in a written statement that nothing would be gained if the banks would simply withdraw. It makes more sense to work out concepts together with customers on how they can reduce CO2 in the long term.