Four big challenges for Deutsche Bank as investors prepare to vote

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Deutsche Bank chairman Paul Achleitner knows only too well how it feels to be on the receiving end of a full-throated German shareholder revolt.

As a supervisory board member at Bayer, the 62-year-old witnessed the unprecedented vote of no confidence that investors delivered to the leadership of the aspirin-to-weedkiller group at its annual meeting last month.

The rebuke came a day after Deutsche abandoned merger talks with Commerzbank — an outcome that makes a similar shareholder backlash even more likely against Germany’s biggest bank at its own annual meeting on Thursday.

With analysts expressing frustration at the bank’s poor performance, and its share price hitting a new record low this week, proxy advisers ISS and Glass Lewis are recommending shareholders deliver a similar stinging rebuke to Deutsche.

“We had initially assumed Deutsche would draw some strategic conclusions ahead of the shareholder meeting,” says Stuart Graham, head of Autonomous research, who believes Deutsche’s management “could well lose” the same confidence vote that Bayer’s did.

Deutsche’s bosses are facing calls to take more drastic action, especially as its revenues keep shrinking, its profits remain stuck far below rivals and it is being investigated for alleged money laundering abuses by authorities around the world.

Whatever the result of Thursday’s vote, the gathering in Frankfurt’s Messe festival hall will concentrate the minds of investors on the many challenges facing Mr Achleitner and his chief executive Christian Sewing.
Fixing the investment bank

The biggest strategic hurdle is to turn round its ailing investment bank, a daunting task underpinning the question of whether Deutsche can hold on to a decades-long ambition to compete with Wall Street’s top banks.

Although Mr Sewing, who has led the bank for just over a year, has started overhauling the business, it still ties up two-thirds … Read More...