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Deutsche Bank, Under Fire, Gets Cover from BASF

Deutsche Bank Anshu Jain-reuters-CHANGED
Deutsche Bank Co-Chief Anshu Jain is basking in praise from industry leaders. Source. Reuters.
  • Why it matters

    Why it matters

    The supportive comments by BASF CEO Kurt Bock are a bellwether of German sentiment on Deutsche Bank’s legal woes.

  • Facts

    Facts

    • Deutsche Bank faces investigations in Europe and the United States.
    • The co-CEO; Jürgen FItschen, is the focus of a probe stemming from the bankruptcy of the Kirch media group.
    • The bank, Germany’s largest, has denied all wrongdoing and says its corporate culture has changed for the better.
  • Audio

    Audio

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The words were soothing balm for troubled Deutsche Bank.

After seeing its co-chief executive, Jürgen Fitschen indicted by the Munich district attorney for obstruction of justice and perjury last week, the bank received encouraging words from a member of upper echelon of German industry.

“It would be nice if politicians would, just for once, recognize that this bank is on course,” said Kurt Bock, the chief executive of BASF at a conference sponsored by the Schmalenbach Society for Business Economics in Dusseldorf last week.

When sensitive financial matters arise, Mr. Bock added, German companies feel more at home with Deutsche Bank and don’t want to make the pilgrimage to British or American financial institutions in London and New York. He said a first-class economy such as Germany needs a first-class bank.

This symphony of praise and support was directed at Anshu Jain, who with Mr. Fitschen is co-chief executive at Deutsche Bank.
Mr. Jain confirmed his belief that large “first-class” companies need universal banks in the same weight class.

“It would be nice if the politicians would, just for once, recognize that (Deutsche Bank) is on course.”

Kurt Bock, BASF CEO

Stefan Krause, the Deutsche Bank chief financial officer, is president of the Schmalenbach group.

The grand ballroom in the Intercontinental Hotel on prestigious Königsallee, the luxury mile in Düsseldorf, was filled with chartered accountants, board-level executives and risk managers, and an illustrious group of guests including Mathias Döpfner, the chief executive officer of German media group Axel Springer.

Mr. Jain said a cultural change was under way at Deutsche Bank and in the industry.

The starting point, he said, was the “emotional breakdown” the banking industry went through in 2012 when confidence in banks evaporated following the financial meltdown. Scrutiny from authorities bred new values that have set new for executive performance and compensation in the banking industry, Mr. Jain said.

The grand ballroom in the Intercontinental Hotel on prestigious Königsallee, the luxury mile in Düsseldorf, was filled with chartered accountants, board-level executives and risk managers, and an illustrious group of guests including Mathias Döpfner, the chief executive officer of German media group Axel Springer.

Mr. Jain said a cultural change was under way at Deutsche Bank and in the industry.

The starting point, he said, was the “emotional breakdown” the banking industry went through in 2012 when confidence in banks evaporated following the financial meltdown. Scrutiny from authorities bred new values that have set new for executive performance and compensation in the banking industry, Mr. Jain said.

 

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Today, he said, about 80 percent of Deutsche Bank’s 100,000 employees know what is expected of them, Mr. Jain said. A major factor in the success of the cultural transition, he said, was “communication, communication, communication” with employees, regulators, politicians and the press.

True to the motto, “trust is good, control is better,” Mr. Jain called for upgrading information technology systems to include forensic tracking methods so that manipulation of global interest rate indexes and other financial markets can’t be repeated.

Even so, Mr. Jain said that the bank still had to win back its popularity.

The indictment of Mr. Fitschen, his co-chief executive, and the resulting publicity, are clearly a setback to that strategy.

But Mr. Jain, in his remarks, didn’t address this. He didn’t have to.

Someone standing at the bar during lunch, Mr. Bock, said it for him out loud.

The author is an 18-year employee of Handelsblatt in Frankfurt, where he writes about banking and finance. To contact him: koehler@handelsblatt.com

 

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