When Germany’s largest lender presented its first-quarter earnings on Thursday, it declared a profit that more than doubled in the first three months of the year, but investors nevertheless sent shares down some 3 percent. They are worried over Deutsche Bank’s declining revenues which cast doubts over Chief Executive John Cryan’s pledge last month to focus on growth.
Mr. Cryan and supervisory board Chairman Paul Achleitner are likely to face tough questions by shareholders at the annual general meeting in mid-May. Stockholders expect the bank to switch as quickly as possible from crisis mode back to growth, following a series of legal woes that threatened to taint the lender’s image.
The first sign of trouble came Friday: Handelsblatt has learned that the influential shareholder advisor Glass Lewis is set to recommend a vote of no confidence in the bank’s executive and supervisory boards at the annual meeting on May 18. While transparency has improved under Mr. Cryan, Glass Lewis argues the legal woes of the past still indicate a widespread failure in leadership.
That failure extends to the bank’s growth prospects. At first glance, the first-quarter earnings looked quite positive with a 52-percent hike in net profit to €571 million ($621 million) – a figure that beat expectations. But revenues in the first three months of 2017 fell 9 percent to €7.3 billion, below the €8 billion analysts had hoped for on average. “The results are disappointing, due to the weakness on the income side,” Kian Abouhossein from JP Morgan wrote in a note.