Deutsche Bank AG (DBK), Germany’s biggest
bank, will consider extending co-Chief Executive Officer Juergen Fitschen’s contract to match that of Anshu Jain.
The chairman’s committee of the supervisory board will
propose extending his contract through March 2017 at a board
meeting in late October, Frankfurt-based Deutsche Bank said
today in a statement on its website.
Deutsche Bank paired the 65-year-old head of operations in
Germany with investment banker Jain, 50, last June to bridge its
roles as a trading colossus that vies with Wall Street firms and
a lender to German companies. The bank is navigating litigation
and probes that include allegations it mis-sold products related
to U.S. mortgages and may have colluded with other lenders to
try to rig interbank lending rates.
“They would like to continue their outstanding work in a
partnership in the coming years for Deutsche Bank,” Paul Achleitner, chairman of the supervisory board, said in the
statement. “Juergen and Anshu have made numerous important
decisions that are positioning Deutsche Bank in the right
direction. We know our company is in good hands with them.”
Deutsche Bank rose 0.8 percent to 35.05 euros at 1:49 p.m.
in Frankfurt today. The stock has gained 6.4 percent this year,
less than the 14.4 percent increase of the Bloomberg Europe
Banks and Financial Services Index.
Legal Costs
In their first year, Fitschen and Jain focused on shoring
up their firm’s capital levels and set aside cash to pay for
potential legal costs such as those resulting from the probe
into interbank lending rates.
Deutsche Bank boosted its common equity Tier 1 ratio to 10
percent at the end of June, in part because of a 3 billion-euro
($4 billion) share sale in April, from less than 6 percent in
2011, company filings show.
The bank increased litigation reserves to 3 billion euros
at the end of June from 800 million euros at the end of
September, according to presentations on its website.
Regulators from Canada to Switzerland are investigating
whether more than a dozen lenders, including Deutsche Bank,
colluded to rig benchmark interest rates including the London
interbank offered rate for profit or to mask their true cost of
borrowing. Barclays Plc (BARC), UBS AG and Royal Bank of Scotland Group
Plc have paid a total of about $2.5 billion in fines after
admitting wrongdoing.
Lost Lawsuit
Deutsche Bank lost a lawsuit today filed by four traders
fired as part of the lender’s probe of the rigging of interest-rate benchmarks. Presiding Judge Annika Gey at the Frankfurt
Labor Court said the bank must give them their jobs back and pay
their salaries.
Deutsche Bank said in July last year that its internal
probe cleared current and former management board members of
wrongdoing in connection with the rate-rigging scandal. The bank
said this July that it has dismissed or sanctioned employees
discovered to have acted inappropriately.
Fitschen’s contract is due to expire at the close of the
bank’s annual shareholder meeting in May 2015, according to the
statement.
The longest-serving employee on Deutsche Bank’s management
board, he began his banking career with Citigroup Inc. in
Hamburg in 1975, before joining the German lender in 1987 and
moving to Asia. Fitschen held positions in Thailand, Tokyo and
Singapore.
His time abroad gave him knowledge of foreign markets and
experience working with the companies that power Germany’s
export-driven economy. He has been head of Germany since 2005.
“We would be pleased to continue to lead the management
board of Deutsche Bank together as partners,” Jain and Fitschen
said in the statement today.
To contact the reporter on this story:
Nicholas Comfort in Frankfurt at
ncomfort1@bloomberg.net
To contact the editor responsible for this story:
Frank Connelly at
fconnelly@bloomberg.net
Source Article from http://www.businessweek.com/news/2013-09-11/deutsche-bank-weighs-extending-fitschen-s-contract-to-match-jain
