Deutsche Bank shareholders have voiced loud criticism of the group’s top management. The bank annoyed many customers with the IT problems at Postbank. The procedure is an “embarrassment”.
At Deutsche Bank’s general meeting there was strong criticism of management because of the massive problems with the service of its subsidiary Postbank. “The problems with Postbank’s IT migration are an embarrassment. A bank cannot leave its customers out in the cold like what happened at Postbank,” said fund manager Alexandra Annecke from Union Investment at the virtual shareholder meeting.
Deka representative Andreas Thomae said that the private customer bank had been “on fire” last year: “The many customer complaints in the course of the Postbank integration not only cost you money, but also your reputation.”
“Quality standards not done justice”
The transfer of Postbank’s customer business to Deutsche Bank’s computer systems led to significant problems last year. Customers were temporarily unable to access their accounts and building financing was delayed. People with seizure protection accounts were temporarily unable to access urgently needed money.
Because the problems were piling up, the financial regulator Bafin sent a special representative. Both Supervisory Board Chairman Alexander Wynaendts and CEO Christian Sewing confirmed in their previously published speeches at the Annual General Meeting that in this case the bank had not lived up to its quality standards and had disappointed customers. It is clear that the bank has “even more work” to do to “further improve its customer service,” said Sewing.
It only recently became known that the financial group is now threatened with billions in additional payments to its daughter’s former shareholders. Deutsche Bank announced provisions of 1.3 billion euros. “This news hit us like a thunderbolt,” said Andreas Thomae from Deka Investment at the general meeting. “This has once again destroyed trust, which Deutsche Bank cannot afford.”
Ups and downs of Deutsche Bank
On the stock market, however, Deutsche Bank has been doing well again for some time. Within twelve months, Deutsche Bank shares rose by more than 60 percent. Shareholder representatives emphasize that the bank has performed better than the banking sector as a whole. The group now wants to continuously increase the dividend.
The largest German bank is represented in the leading index since the DAX was founded in 1988. During this time, Deutsche Bank experienced highs, but also some lows. After the financial crisis, scandal after scandal followed: from interest rate manipulation to money laundering. For five years in a row, from 2015 to 2019, the group made losses, some of them horrendous.
But these times are over, said CEO Sewing at today’s annual general meeting of Deutsche Bank: “We first had to stabilize our bank and then reposition it in order to reorient it towards customers. We had to transform it in order to be profitable again. We have that We did it.”
Last with Billions in profit
Recently, business has been going better than it has in a long time. Deutsche Bank reports a pre-tax profit of 5.7 billion euros for 2023. It is the best result in 16 years.
Investor advocate Klaus Nieding from the German Association for the Protection of Securities Holdings (DSW) sees the bank as stable in all areas. The company is making money: “The question that has to be asked is: Will it be able to do this if interest rates are now possibly falling bit by bit?” But at the moment, says Nieding, the bank is in a good position.
However, the share price is still a long way from its best times. Anyone who bought Deutsche Bank securities before the financial crisis, around 2007, is still sitting on a big loss. According to investor advocate Klaus Nieding, the past has left its mark: “not only on the balance sheet – but also on the share price.”
lagging behind in European comparison
One thing hasn’t changed in recent years – Deutsche Bank is still not one of the big players in the European banking business. The British HSBC, BNP Paribas from France and also the Swiss UBS are clearly ahead when it comes to total assets or market capitalization.
In the domestic market, Deutsche Bank continues to compete primarily with the German number two – Commerzbank. Can the banks come close to the largest European financial institutions in the long term? DSW lawyer Klaus Nieding emphasizes that it depends on whether the banks continue to act independently: “Or, as in the case of Commerzbank, for example, the question is repeatedly asked whether there might be a European merger.”
With material from Sebastian Schreiber, ARD financial editorial team.