When the long-suffering shareholders of Germany’s largest bank filed into the cavernous Festhalle in Frankfurt Thursday for Deutsche Bank’s annual meeting, few had reason to be happy. Shares in the bank, once a symbol of German financial acumen and its global aspirations, have fallen by more than half over the last year.
The dividend had been eliminated for a second year in a row as the Frankfurt-based institution enters a long, painful process to restore one of Germany’s largest private-sector employers to sustainable profit — a recovery that is by no means guaranteed.
So what was most striking as the day-long meeting began was the relatively muted level of outrage that permeated the opening comments of shareholders and their representatives. Should that refrain assert itself, which appeared to be the case, the bank’s owners will likely give a clean bill of health later Thursday to the work of the top management board and policy setting supervisory panel, as well as its embattled chairman, Paul Achleitner.
More than a sense of gratitude, one observer said disappointed shareholders were fearful of further rocking the boat at one of Germany’s biggest listed companies, as it struggles to find a way out of its financial mess.
“There is a sense that the bank is in such a fragile state, that the last thing it needs right now is more turmoil, especially more personnel change at the top,” said one longtime observer of the bank, who declined to be named. “I think you will see a lot of vocal concern, but no real change in the direction of the institution.”
That kind of breathing room could give the bank’s sole chief executive, John Cryan, more time to put into place a halting restructuring at Deutsche Bank. Mr. Cryan, a taciturn British banker who is credited with helping revive Swiss bank UBS, is by now well known in German banking circles for his sober mien, and his willingness to openly lambast the bank for its past transgressions.
The new chief executive of Deutsche Bank — who officially took sole control Thursday with the retirement of his co-CEO, Jürgen Fitschen — left no doubt that 2016 will be another lost year for shareholders.
After surprising investors with a profit in the first quarter, following a record €6.8-billion loss in 2015, Mr. Cryan has warned investors to brace for another slight loss for the full year.
Deutsche Bank’s big clean-up will continue in 2016, Mr. Cryan promised to the gathered 10,000 shareholders, before its fortunes start to improve.
“We need a Deutsche Bank that once again finds its place in the middle of the community,” Mr. Cryan told shareholders, acknowledging the line should be “self-evident” but was actually something Germany’s largest bank had to earn after years of an eroded public reputation. “We want to be able to look forward again,” he added.