It was a possibility executives at Germany’s largest bank had long been dreading: State prosecutors officially indicted co-chief executive Jürgen Fitschen and four former executives for obstruction of justice, further dragging out a decade-long saga between Deutsche Bank and the one-time media empire of Leo Kirch.
Market reaction to the indictment was muted. Shares fell only about 10 cents as news broke over the course of Tuesday to close at $32.88. Analysts link the drop to the fact that Deutsche Bank, already embroiled in a series of legal disputes ranging from manipulation of currency benchmarks to ignoring U.S. sanctions, has far bigger problems that can hurt its bottom line. The bank has set aside €2.2 billion for settling future legal disputes and is also in the middle of a restructuring process that will last at least until 2016.
Nevertheless, the case marks another knock to the bank’s image, which has already been tarnished. State prosecutors in Munich this week formally indicted Mr. Fitschen, former chief executives Josef Ackermann and Rolf Breuer, as well as former board members Clemens Börsig and Tessen von Heydebreck, according to Handelsblatt sources close to the case.
Munich-based judge Peter Noll will now have to decide whether to bring the matter before a court. Such a court case against five bank executives would be unique in German history. A decision by the judge could take months. Further indictments against other witnesses and Deutsche Bank lawyers also could be brought, sources said.
The case is also a heavy personal blow for Mr. Fitschen, who came to the helm in 2012 together with Anschu Jain, promising to clean up the bank’s reputation. Mr. Fitschen brought contacts and a focus on private banking that has complemented Mr. Jain’s expertise in investment banking.
Analysts said that should Mr. Fitschen be forced to resign, Mr. Jain would likely remain as the bank’s sole chief executive, but there is no such talk within the bank itself. Mr. Fitschen has vowed to fight the charges, and Deutsche Bank has pledged to stand behind its head should the process go to court. While it would not comment on the indictment directly, a spokesperson said the bank remains “convinced that the charges against Jürgen Fitschen will be proven unfounded.”