Deutsche Bank responds to shareholder criticism

Deutsche Bank encountered anger from its shareholders at its annual general meeting on Thursday.

Investors are uneasy about Deutsche's profit growth, mounting regulatory fines, and restructuring plans.

Hermes Equity Ownership Services, which holds a stake of almost 5% in Deutsche Bank, has called for the bank to make sweeping changes to its management.

"We no longer have confidence in the management board," said Hermes' director Dr Hans-Christoph Hirt.

The company's chief executives responded to criticisms and requested more time to change the bank.

'Unsatisfactory delivery'

"We have not delivered, so far, the returns you expect and deserve," said Deutsche Bank's co-chief executive Jürgen Fitschen.

"However, we are convinced: we are moving Deutsche Bank in the right direction. For that reason, we ask for your continued support," he added.

Dr Hirt said in a statement on Wednesday that Hermes would "vote against the so-called discharge of the members of Deutsche Bank's management board."

"We have questions about the unsatisfactory delivery on key targets of their strategy, which has led to very poor performance of their share price," said Hermes' director Dr Hirt on the BBC's Today programme on Thursday.

"We are also concerned about what seems to be limited progress on culture change and dealing with litigation investigations.

"Last but not least, we are very concerned about the $2.5bn fine to settle the investigations into the Libor rigging involvement of Deutsche Bank. It's not just the money. The findings of the regulators suggest very serious misconduct. It's something we think the management is responsible for," he added.

Hermes is not the only investor to voice disappointment. "Management should step down. The horrendous fines are eating away profits and as a result there's no money left for sensible projects," small-time investor Walter Liehmann told the news agency AFP.

Mr Fitschen commented on the Libor fine at Deutsche Bank's annual meeting. "We deeply regret this issue and we're relieved to have settled it," he said.

Restructure and reshuffle

"In two areas, we have not delivered as we intended to," said co-chief executive Anshu Jain.

"First, resolving legacy litigation matters has taken longer, and been very costly...Second, cost-efficiency remains a challenge," he said.

Last month, Deutsche unveiled the next phase of its plan to boost profitability, Strategy 2020, but shareholders, including Hermes, have said there is not enough detail.

Late on Wednesday the bank reshuffled its board. Co-chief executive Anshu Jain will now head up the bank's restructuring plan. Hermes dismissed the reshuffle as insufficient.

A Deutsche spokesman declined to comment.