Deutsche Bank's bosses tried to convince skeptical shareholders at a lively annual meeting on Thursday that the bank was on the right track again after facing a host of legal problems.
Co-chief Executives Anshu Jain and Juergen Fitschen, who took charge nearly a year ago, are trying to steer Germany's largest bank through a major restructuring and resolve its many legal issues.
Continue Reading Below
They are also trying to reshape the bank in the wake of the financial crisis for an industry with lower profit margins and higher regulatory costs.
Fitschen told shareholders that the strategy overhaul was paying off. "We are on the right track."
Jain attempted to strike a personal chord with the crowd by delivering his speech in German. Shareholders applauded as Indian-born Jain apologized for his shaky command of the language and he made a pledge to improve it over the next year.
He was interrupted by a group of around 10 protesters who shed black suits to reveal red t-shirts emblazoned with the words "The Superfluous", an activist group campaigning for an end to extortion, war, discrimination and racism. Security guards bundled them off so Jain could continue his speech.
Thursday's meeting is the bank's second shareholder gathering this year. In April, Deutsche had to hold a special shareholder vote after protesters had legally contested its 2012 annual general meeting. The bank had to put up a waist-high fence to protect management from angry shareholders, who demanded an improvement in the group's corporate governance.
The bank's legal and regulatory issues include a probes into a tax evasion scheme involving trading carbon permits and allegations of mis-selling complex financial products. Deutsche is one of a dozen banks being probed for allegedly rigging benchmark interest rates.
Ingo Speich, portfolio manager at Union investment, said the legal and regulatory problems had dented the bank's image.
"The clean-up has begun but it will take a long time until trust in the bank is restored," Speich said in the text of a speech prepared for the meeting. "The new direction and the initial results are on the whole positive. Now it's about staying on track," he said.
Klaus Nieding, who represents DSW, Germany's largest association of private investors, said the past 12 months had been a mixed bag for the bank. "We seem to be unable to open a daily newspaper without reading about some regulatory scandal which Deutsche is involved in," he said.
Nieding praised Jain's German speech and encouraged the bank to continue its cultural change to avoid more sandals. But he also told Jain: "Please understand my skepticism about your conversion."
Jain and Fitschen have taken great pains to emphasize a culture shift at Deutsche toward greater moderation in its approach to risk-taking. Jain has even agreed to a voluntary pay cut.
They have also taken steps to boost the bank's capital to quash doubts about its ability to weather financial shocks. Deutsche earlier this month completed a 2.96 billion euros ($3.8 billion) share issue.
Shareholders arriving for the meeting had been met by jeering protesters gathered outside the building. Nadia Lucas, an activist with protest group Blockupy Frankfurt, said she was protesting against Deutsche Bank's support for companies that make components for the arms industry. Another protestor had smeared fake blood on his face and chest.
($1 = 0.7766 euros)
(Additional reporting by Jonathan Gould. Editing by Jane Merriman)