Deutsche Bank CEO speaks of
Deutsche Bank executives met with shareholders Thursday, as the bank's tumbling share price and growing backlog of scandals place the board firmly in the firing line. The embattled German lender saw its share price hit a record low Thursday, down nearly 5% since the start of the year. On Monday, UBS downgraded its stock to a "sell" rating from "neutral" and cut its target price from 7.80 euros ($7.45) to 5.70 euros.
Reports this week suggested substantial shareholders will push for the removal of Deutsche Chairman Paul Achleitner ahead of his term expiry in 2022. However, CNBC sources said Tuesday that the bank expects Achleitner to retain his premiership with around 60% shareholder approval.
Deutsche also faces pressure to trim its investment banking division following the collapse of merger talks with domestic rival Commerzbank. Investment banking (IB) is the specific division relating to the creation of capital for other companies, governments or entities.
Addressing shareholders Thursday, CEO Christian Sewing said the bank will accelerate its transformation by "rigorously focusing our bank on profitable and growing businesses which are particularly relevant to our clients."
"We're prepared to make tough cutbacks," he said, without elaborating on where the cuts would occur.
The UBS downgrade note highlighted that Deutsche's IB would have been a "key beneficiary" of the deal with Commerzbank, helping reduce funding costs and spreads, and balance the overall profile. Influential shareholder proxy Institutional Shareholder Services (ISS) has advised its members to vote against "discharging" Deutsche's board, the vote of confidence under the German corporate code. It claimed that shareholders had