Deutsche Bank Chairman Gets Support of Investor Sheikh Hamadby and
Achleitner should stay in his role, key shareholder says
Sheikh Hamad's Paramount Services owns 3.1% stake in lender
Paul Achleitner won support to stay on as chairman of Deutsche Bank AG’s supervisory board from one of its biggest shareholders, former Qatar Prime Minister Sheikh Hamad bin Jassim bin Jabr Al Thani, countering speculation that cast doubt on his leadership.
Achleitner should continue in his role after 2017, according to a statement Wednesday from Paramount Services Holdings Ltd., which is controlled by Sheikh Hamad. That investment firm holds 3.05 percent of Deutsche Bank stock. New York-based BlackRock Inc. is the biggest shareholder with 6.2 percent, according to data compiled by Bloomberg.
“Achleitner’s leadership remains an important factor underlying Paramount Services Holdings’ investment case and confidence in Deutsche Bank,” the investor group said. The Financial Times reported Paramount’s support for Achleitner earlier.
The rare public endorsement follows a March 17 report by Manager Magazin that Sheikh Hamad was against a second term for the 59-year-old, installed in May 2012, after his contract expires next year. The Frankfurt-based bank’s shares have lost more than half their value over the past year as Achleitner replaced former co-Chief Executive Officer Anshu Jain and an overhaul under new co-CEO John Cryan has so far failed to revive profitability.
Deutsche Bank, the worst performer in the Euro Stoxx 50 Index after Volkswagen AG over the past 12 months, fell 1 percent to 15.21 euros as of 3:09 p.m. in Frankfurt on Wednesday.
The Qatari support comes less than two months before Deutsche Bank’s annual shareholder meeting on May 19, an event that last year saw broad backing for Achleitner even as investors voiced widespread criticism against Jain and the bank’s strategy. The spotlight has now moved to Achleitner, a former Allianz SE top manager who previously headed Goldman Sachs Group Inc.’s German branch, as the shares continue to languish, said Dieter Hein, an analyst at Fairesearch with a sell recommendation on the stock.
“The fact that the Qataris had to come out with a denial shows that the pressure on Achleitner remains,” Hein said.
Deutsche Bank is eliminating thousands of jobs and selling assets to bolster capital buffers and profitability after the company was hit with a series of misconduct fines, many of which originated in its fixed-income unit.
The company said this month that industrywide revenue from bond trading, which generates the biggest share of Deutsche Bank’s earnings, will probably decline this year because of market turmoil.
Difficult trading conditions this year mean “greater downside risk” for the bank as well as Credit Suisse Group AG and Barclays Plc, which are also overhauling their businesses, analysts at Fitch Ratings in London wrote in a report on Wednesday.
Deutsche Bank’s restructuring “should help it concentrate on its key strengths, but successful execution will be critical,” the Fitch analysts wrote. “Improvements in capitalization and earnings heavily rely on revenue being maintained or improved, leaving the bank vulnerable to adverse business conditions.”