(UDHAYAM, COLOMBO) – Deutsche Bank (DBKGn.DE) expects former board members to contribute substantial sums toward the costs of its past misconduct as Germany’s biggest lender seeks to rebuild its reputation, its chairman Paul Achleitner said.
Achleitner told shareholders at Deutsche Bank’s annual general meeting on Thursday that its supervisory board and two committees were discussing the need for personal and collective responsibility and the bank had sought external legal advice.
“The supervisory board expects that in the coming months, there will be an arrangement which ensures that the individuals involved make a substantial financial contribution,” he said, adding that while no decision had yet been reached, discussions were at an advanced stage.
The talks are focusing on why Deutsche Bank’s own response was so slow, as well as its involvement in a series of financial scandals, Deutsche Bank sources told Reuters. Collective responsibility of the board for the bank’s actions as a whole were at the center of the talks, rather than personal failure or involvement in individual litigation cases, they added.
Achleitner did not name any individuals, but Deutsche Bank sources said the board is in talks with around ten people, including former chief executives Anshu Jain, Juergen Fitschen and Josef Ackermann. Talks are underway with other former board members including Stephan Leithner, Rainer Neske, Henry Ritchotte, Stefan Krause and current board member Stuart Lewis.
Deutsche Bank said Lewis would not comment, while spokesmen for Jain, Ackermann and Neske said they would not comment. The other former managers did not respond to requests for comment.
If Deutsche Bank reaches settlements with former executives, it would mark a significant step in efforts to break with a turbulent period in the bank’s 147-year history.
Such settlements are fairly rare, according to Michael Kramarsch, an expert on executive compensation and managing partner of consultancy HKP Group.
“This is a moment where the compensation regime in banks kicks in in full drastic and dramatic force,” Kramarsch said. “This is what banking compensation regulation was designed for, as cynical as it sounds.”
Deutsche Bank transformed itself into a major player on Wall Street over the past two decades, but extravagant bets and poor conduct have resulted in a litigation bill of 15 billion euros ($16.7 billion) since 2009.
And while rivals spent the years after the 2008 collapse of Lehman Brothers cleaning up and finding new business models, Deutsche Bank was slow to restructure and improve compliance.
Courtesy: REUTERS
