Frankfurt Am Main: Germany’s biggest lender Deutsche Bank expects to recover “significant” sums from former executives over past failures, its supervisory board chief said Thursday.
“I can report today that the supervisory board is in advanced talks with the affected [former] board members,” chairman Paul Achleitner said.
“Our expectation is that there will be a settlement securing a significant financial contribution.”
Deutsche has since 2015 held back millions in bonuses due to some 11 former board members, including former co-chief executives Juergen Fitschen and Anshu Jain and their predecessor Josef Ackermann.
The once-hidebound institution’s aggressive bid to launch itself onto the global stage in competition with US investment banking giants is blamed for its present weakness, leaving it entangled in thousands of legal cases and struggling for profitability.
Shares in the bank were trading at €16.62 ($18.50) just before 1100 GMT Thursday — a far cry from the peak of €91.17 attained in 2007.
Losses
Present CEO John Cryan launched a massive restructuring at the troubled bank after taking office in 2015, planning to slash thousands of jobs and refocus on home market Germany.
The bank reported a near-€7.0 billion net loss in 2015 and last year followed up with losses of 1.4 billion, a performance well short of analysts’ expectations.
It reached a $7.2-billion settlement with the United States in January over its role in selling mortgage-backed securities in the run-up to the crisis, before issuing new shares worth 8.0 billion euros in April.
Cryan brought Deutsche back into profit in the first quarter, bringing in 575 million euros, as well as boosting the capital buffer banks keep on hand to weather financial shocks.
“We believe that the worst is behind us, even if there are still legal cases pending” Cryan told shareholders Thursday. “In many areas, business is running very promisingly.”
Deutsche Bank has set aside some €3.2 billion to cover further potential legal costs.
