Thursday, May 27, 2021
Unusual harmony
Shareholders urge Deutsche Bank to pay dividends
Has Deutsche Bank achieved what it has been aiming for for years – the turn for the better? At the Annual General Meeting, the corporate management is praised more persistently than seldom. Now the shareholders are again focusing on the question of an appropriate share of the success.
Compliments from shareholders and no protests from activists – this year’s Annual General Meeting of Deutsche Bank went differently than usual. CEO Christian Sewing showered with praise from major investors such as Deka and Union Investment as well as representatives of small investors. The bank is in a much better position than it was a few years ago. They therefore pushed for an end to the dividend break. There was criticism of the bonus payments, deficiencies in money laundering controls and the choice of auditor. For senior controller Paul Achleitner, the last year began at the largest German financial institution.
“We are firmly resolved that we will finally be able to propose a dividend again next year,” Sewing promised the shareholders at the annual general meeting, which was again broadcast on the Internet because of the corona pandemic. From 2022, the bank wants to distribute five billion euros to investors. They haven’t received a dividend for two years; in previous years it was only a few cents.
“Light at the end of the tunnel”
“Don’t be stingy on dividends, Mr. Sewing! The shareholders were kept short for a long time,” said portfolio manager Alexandra Annecke from the investment company Union Investment. In general, however, Annecke believes the bank is on the right track. “We see light at the end of the tunnel.” For a long time, Deutsche Bank had been counted on the capital market, but now it is a “turnaround story”. In 2020, the first surplus in seven years was 113 million euros.
However, Deutsche Bank’s profit last year was largely due to growth in investment banking, which also went exceptionally well at other institutions as a result of the Corona crisis. Some investors worry that these returns will not be sustainable.
In the past few years, investors had taken the annual meeting as an opportunity for a sharp settlement with the board of directors and supervisory board. However, there were no billions in losses with risky business in investment banking, wrong personnel decisions and falling share prices in the past financial year. For the first time in three years, the share costs more than twelve euros. The price has almost tripled since March 2020.
Achleitner successor still open
Some investors consider the appointment of EY as a new auditor to be unsustainable. The auditing company is criticized for not having uncovered the balance sheet manipulation at Wirecard earlier. Several corporations have already turned their backs on EY. For 2022, the Deutsche Bank wants to rewrite the test mandate, as Achleitner said.
Achleitner reiterated its goal of handing over the baton after the Annual General Meeting in May 2022. When looking for a successor, however, he did not look into his cards. The Supervisory Board’s nomination committee would propose a suitable candidate in due course, he just said.
The two members of the Supervisory Board, Theodor Weimer, CEO of Deutsche Börse, and Norbert Winkeljohann, who currently heads Bayer’s supervisory body, are potential successors. Former VW CFO Frank Witter is also considered a possible candidate in financial circles. Witter is to move into the supervisory board.
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