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Deutsche Bank Co-CEOs To Resign Amid Shareholder Frustration
Back in May, Deutsche Bank’s co-CEOs Anshu Jain and Jürgen Fitschen got a rude awakening.
At the bank’s annual meeting, less than two-thirds of shareholders said they approved of top management’s performance. That was down markedly from nearly 90% the year before.
At issue: ambiguity surrounding planned cost cuts, distant profitability targets, and investor concern about the bank’s corporate culture.
Deutsche, perhaps more than any other firm on Wall Street, embodies the corrupt bank stereotype.
Allegations against the bank and its employees range from rate-rigging to the violation of US sanctions on Iran. Legacy litigation has cost the bank around $9 billion over the past three years alone and that figure could rise materially as reports suggest the DoJ may seek to extract a settlement of as much as $2-3 billion related to soured MBS in the coming months.
The problems go beyond the high profile cases. Last month for instance, Deutsche paid $55 million to settle an SEC investigation related to allegations the bank deliberately obscured billions in paper losses on a derivatives book tied to the 2007 collapse of the Canadian ABCP market.
From Deutsche’s annual report:
We are currently the subject of regulatory and criminal industry-wide investigations relating to interbank offered rates, as well as civil actions. Due to a number of uncertainties, including those related to the high profile of the matters and other banks’ settlement negotiations, the eventual outcome of these matters is unpredictable, and may materially and adversely affect our results of operations, financial condition and reputation.
A number of regulatory and law enforcement agencies globally are currently investigating us in connection with misconduct relating to manipulation of foreign exchange rates. The extent of our financial exposure to these matters could be material, and our reputation may suffer material harm as a result.
A number of regulatory authorities are currently investigating or seeking information from us in connection with transactions with Monte dei Paschi di Siena. The extent of our financial exposure to these matters could be material, and our reputation may be harmed.
Regulatory and law enforcement agencies in the United States are investigating whether our historical processing of certain U.S. dollar payment orders for parties from countries subject to U.S. embargo laws complied with U.S. federal and state laws.
We have been subject to contractual claims, litigation and governmental investigations in respect of our U.S. residential mortgage loan business that may materially and adversely affect our results of operations, financial condition or reputation.
You get the idea.
Now, shareholder frustration over the bank’s performance and the seemingly intractable nature of the firm’s legal problems have culminated in the resignation of Jain and Fitschen. WSJ has the story:
Anshu Jain and Jürgen Fitschen, the embattled co-chief executives ofDeutsche Bank AG, plan to announce their resignations, according to people familiar with the matter, an abrupt move that throws into question the future direction of one of the world’s largest banks.
Mr. Jain, a longtime trader and investment banker, plans to step down effective at the end of June, one person said. The other co-CEO, Mr. Fitschen, plans to leave after Deutsche Bank’s annual shareholder meeting next May, the person said.
The joint resignations, which could be announced as soon as Sunday, follow a series of financial missteps and regulatory penalties at the giant German bank, which has investment-banking and wealth-management operations all over the world. Most recently, the bank was forced to pay about $2.5 billion and to plead guilty to resolve accusations that its traders tried to rig benchmark interest rates, including the London interbank offered rate, or Libor. Some big shareholders have voiced increasing displeasure with the bank’s performance and the management team’s turnaround plans.
Adding to the pressure, Mr. Fitschen is on criminal trial in Germany in connection with the collapse of the Kirch media empire. Mr. Fitschen, 66 years old, has denied the charges.
The sudden resignations introduce the possibility of major change at Deutsche Bank. In April, Messrs. Jain and Fitschen took their latest stab at an overhaul strategy designed to streamline the at-times unwieldy bank and to boost its profitability. But to the disappointment of some shareholders, they stopped short of a radical plan to break up Deutsche Bank’s investment-banking and retail-lending operations into separate companies.
The catalyst for the sudden resignations is unclear.
The supervisory board has convened an emergency meeting on Sunday to discuss the bank's leadership, the source said. It was expected to appoint John Cryan, the former chief financial officer of UBS, to replace Jain, Britain's Financial Times newspaper reported.
Deutsche Bank has struggled to restore an image tarnished by a raft of regulatory and legal problems which include probes into alleged manipulation of benchmark interest rates, mis-selling of derivatives, tax evasion and money laundering.
In a last ditch effort to restore confidence in its leadership, the German lender presented a radical management shakeup on May 21, only to face calls for Jain to resign from staff situated in its own headquarters in Frankfurt.
Some investors demanded more changes to restore confidence.
John Cryan, former UBS CFO, is reportedly in line to take the helm.
* * *
With Jain — the veteran trader and investment banker — on his way out by the end of the month, the bank's derivatives book (which is 20 times larger on a notional basis than Germany's GDP) will now be under the sole supervision of Fitschen, who, as Reuters reminds us, "is required to appear every week at a criminal court in Munich to defend himself against allegations that he misled investigators in a dispute with the heirs of the Kirch media empire."
How fitting.
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Deutsche Bank appoints John Cryan to succeed Jurgen Fitschen
more:
http://tersee.com/#!q=Deutsche+bank&t=text
Those darn H1-Bs http://en.wikipedia.org/wiki/Anshu_Jain Foreign born "Illegal Immigrants" everywhere and it's all Obama's fault.
Are those two going to jump from the window together, holding hands, or will they nailgun each other in the head? ;-)
Looney
No, getting out the Golden Parachute before it all goes tits up
Well, that should finally do it. Once your Co-CEOs resign it's a foregone conclusion the next person/persons in their slot will reform the place and put it back on the straight and narrow. A change in outward appearance always signals an inner change of direction.
No, it means the next person is hired to dismantle the doomed pile of shit they left behind.
If you say "nail guns" ten times fast it sounds like "snail guns".
Just sayin'...
;-)
Exactly! Mega - $$$ million payout from an insolvent bank. "Frustrated shareholders" fucking moronic dupes.
Looney - Can't they do both at the same time? One can hope...
I seem to recall something about "guest workers".
Now what was that time frame?
Deutsche Bank's co-CEOs just follow orders, obedient lapdog banksters, so when that cesspool of corruption known as the US Department of Justice tells them to pay up, they roll over and then fork over the money. Now Loretta Lynch has money to spare to fix up her office suite, including new gold-plated faucets in her bathroom. Yet, the USDOJ is totally silent when it comes to the murder and horrific torture of detainees held by the the Army, the CIA and other Gestapo clones the USA operates.
http://www.internationalist.org/iraqtorture0504.html
getting out while the getting is good. but nowhere to hide once you've taken part in screwing the entire world.
In an industry where every single player is corrupt, how is any of this negative to the shareholders? How do you lose market share in a corrupt industry for being corrupt?
SOMEBODY GONNA GET HURT REAL BAD.
JP Morgan fired 5,000 last week onwards...HSBC is set to announce 20k cuts next week...Deutsche is losing both CEO's due to the Russian money laundering scandal impacting their derivatives and closure of almost their ENTIRE retail network globally. Their Global Head of Retail also quit on May 20.
Some very bad news is to be expected in the next couple of weeks at anytime...probably at the time of results...maybe even next week or two.
Because the boards of Top 20-30 corporation do not meet on a Sunday! And then appoint a new CEO over a weekend.
#deglobalization. Piraeus bank sold their Egypt operations and Tesco is closing Korea, UAE left Tanzania telecom sector. National Bank of Greece is trading at just above 1 EUR.....killers are escaping using drilling tools from MAX security NY prisons...millions are dying from drones and missiles that too thrown by US and Ukraine military on their OWN citizens. https://www.youtube.com/watch?v=E6M4JHNB5-M......
But hey, the economy is doing just fine! ;) ... FULL sarc.
There is no need for and has never been a need for derivatives.
The original futures contracts for agricultural products and industrial materials were between producers and users through a financial intermediary (either or both a banker and a merchant). Overtime speculators were allowed into the mix. That is where the problem started.
Beginning with the introduction of index futures in the 1970s, the financial intermediaries have sought to monetize everything. It is now more like side betting at a craps game, instead of a way to facilitate commerce.
Remove the speculator from the process, and the threat to financial collapse due to misallocation of money would be reduced accordingly.
As for mortgage financing, the lender at the origin of the loan should be required to hold onto at least 25% of the mortgage until that loan has closed. There should be no bundling of such loans. Rather each mortgage must be owned by specified individual entities and separate from any other debt.
Blythe would spank you....hard....for such insolence.
If there were no derivatives than how could Jamie and the rest of da' crew do God's Work plus rig the gold / silver market at the same time. Duh?!
I'm agreeing with fockewulf190, hard spankin' for even speaking these type of words. Next thing you'll say somethin' crazy like they should re-enact the Glass-Steagall Act. Crazy talk I tell ya'.. Crazy!
Oooh! Me! Me!
DavidC
Jain the Invesment bankster leaves the ship floundering, if the doldrums hit the German finance sector; which it will with Grexit if it is allowed.
Euro group has to decide if it wants to kick the can down the road or to take the blow sooner than later.
Whatever the decision this financial construct is dead as the Bourbons in their descent to 1789.
What happened to Greece? Did miss something? Is it all fixed? Nary a peep here or anywhere else.
Listen to Juncker's mega rant at G7 beer fest and you will understand that Grexit is a pain that will keep coming for the EU landlords.
BTW / If Erdogan loses his majority in Turkey we will have a new murky deal in Syrac; and Sunni coalition working behind the Jihadi curtain will get moar crazy !
The chickens are coming home to roost in many places!
Rats leaving a sinking ship. Who would want to stay onboard let alone at the helm with this ginormous iceberg dead ahead!
DB will definately be one of the next two big fraud banks to go down. Bank of America ???
yes. b of a does seem to be our sacrificial goat. but then again, they could forestall the whole thing to the point where they all go down together, at once.
I have a friend, 74 now, a high net worth fella. He maintains accounts in multiple banks.
Got sick and tired of BofA's bullshit, and walked in to close the account.
They tried,briefly, to talk him out of it. He demanded, loudly, close the account, and give me a check. They did.
Two months or so later, he notices BofA mail in the stack. The stack is quite a stack. ( they know this) . It was a BofA statement. They left a PENNY in the account, did not actually close it! And he was getting charged monthly maintenance fees for the low balance.
The next trip wasn't so pretty.
Another friend let his girlfriend use his debit card to buy a wedding gift at Amazon. It was charged to the account 3 times ( in error!) a $400 + purchase. When he finally got through to someone who spoke English, they apologized and said they would refund the account in 7-10 days!
It's a rape fest every day. Banks, government, police, immigrants.
Wheels, please come off cart. Please.
Apparently some state governors want to get in on the Banking Action, Rent Seeking for their failed Budgets.
- Cash-strapped Kansas moves to limit ATM withdrawals for residents on welfare...(to increase fees, tax revenue)
But just read in Wikipedia it is illegal to add fees on EBT Cards.
"It is illegal for anyone to charge sales tax, surcharges or card processing fees from an EBT SNAP account, according to federal law and USDA SNAP Guidelines.[4]"
https://en.wikipedia.org/wiki/Electronic_Benefit_Transfer
It's well known here that Amazon treat their workers like slaves in Germany, I do not buy anything from them, they are basically sweat shops, and people should stop using their services. Also I closed my PayPal acc. just before the new terms of service (Terms of service, hahahaha, funny one that.) People should see the new terms, crazy stuff. Also I shut down my ebay acount for the same reason, I stated to them also I did not agree with their terms. I do not buy anything online anymore, I shop local and only buy local goods. I do not buy the tribes goods or anything linked to any of the tribes.
ekm has been consistent in predicting Barclay's as the next sacrificial Lehman. FWIW.
http://www.zerohedge.com/news/2014-11-26/madness#comment-5492050
http://www.zerohedge.com/news/2015-04-06/dismal-data-sparks-biggest-stoc...
Personally, I think the scapegoat will be whoever doesn't have juice with the Secretary of the Treasury at the time.
Maybe Deusche Bank Co-CEOs didn't contribute enough to Zio?
http://www.bloomberg.com/news/articles/2015-06-07/u-s-billionaire-politi...
More rich guys bailing...
If all else fails you can always pay half of the poor people to kill the other half.
But then you're still stuck with half the poor people, and now they're murderers with experience.
Gangster Rap; Mafioso.
Co-Capo-dei-Capi's with one stepping down ASAP and t'other sometime After his criminal fraud charges. . . . . and YET the NAZI Wolf-Gang(Bang) Squauble is Screaming from the Roof Tops that Greece's 250 billion heuros is Undermining the EUseless AUSTERITY DRIVE.
What a Pathetic CORRUPT CHARADE IS GERMANY. HaHa Charade Du Bist.
. . . . and if i tell you the Name of the Game Boy it's Gonna Drive You INSANE . . You well-healed PIG Wheels, Ha Ha Charade You Are . . .
YOU Jumped-Up CLOWN FUCKS HA HA Charade Du Bist.
HOW MANY TRILLION YOU BANKRUPT FILTHY MUTTI-FUCKERS???????
What's the bet he accidentally falls into a Vat of Beer and drowns before he resigns.
No wait, I think they already did that one. He was out walking his dog, and a cargo door of a Plane carrying a Plane load Piano's accidentally opens
Here's an idea. Instead of hiring another useless and obscenely expensive CEO, hire a good accountant to replace those worthless bitches as well as the CFO and save a couple of billion in wasted expense. Two CEOs are twice as useless as one, which in turn is 100 times more useless than none.
I'll play a wild hunch there's a lot of " Greece " tucked away in them thar books.
Yeah Fucking Yeah PRUDENT My ARSE
Bailing out Ze EU Ja?
SANCTIMONIOUS LipStick on my DipStick Snide Strudel Herren
We Are Ze World
We JOIN Ze PIG FUCHS . . .
So Let's Start Giving . . .
DoushLand DouschLand Uber Alles
No problems there.
If the NWO is going to take over the world they better do it now.
https://www.youtube.com/watch?v=mytLRy32Viw
Why wouldn't the CEO & CFO fire the under staff of a organization illegal activity? Seems suspicious.
There are plenty of Royalty waiting to step into place at Banks.
He steps down, remains Royal. No biggie.
I'm sure we will be transferring more of our Wealth to him real soon...
Those quotes from the annual report reads like it comes from a template. The same template used by JP Morgan, Goldman, Citigroup, B of A, Morgan Stanley and everyone else. Whoever devised this template language better have gotten a lot of money for it or he/she was a very poor negotiator.
USA: the Disposable People http://m.youtube.com/watch?v=CiqipcWb3_wOk, and now make a final contribution to mankind and JUMP, you fuckers!
http://www.reuters.com/article/2014/03/25/us-britain-banking-broeksmit-i...
How can this be painted as anything other than a couple of very important rats leaving a sinking ship? What do they know about the inner state of global finance that we don't?
http://wolfstreet.com/2015/06/06/germany-france-call-for-fiscal-and-political-union-public-ignorance-vital-for-success-of-eu-power-grab/
Germany, France Call for Fiscal and Political Union. Public Ignorance Vital for Success of EU Power Grab
This seems like a pretty big deal. It is difficult to get excited over it because it seems to be just another large financial market disturbance in the midst of a financial market shit storm, which is being completely ignored in its entirity by the entire financial market. The silver and gold is still for sale on the usual internet sites, so to me it is apparant that the giant slow moving suspended reality turd has not yet encountered the fan - but who knows? Perhaps this is it - LOL!!!
Smarter than Raj Rajaratnam and Rajat Gupta. Gives up his 15 M Golden Parachute. But when the Derivative shit hits the fan where will he hide?
Shareholder frustration? Of course the shareholders were frustrated. Why did these two clowns let themselves get caught so many times. It's embarrassing.
This could very well be the catalyst that throws the entire train off it's tracks.