Deutsche Bank faces up to long battle to restore reputation
By Thomas Atkins and Arno Schuetze
FRANKFURT (Reuters) - The reputational risks surrounding Deutsche Bank (DBKGn.DE: Quote) have grown and it still has some way to go to win back public trust and prove it can overhaul its corporate culture, the bank's two chief executives said on Wednesday.
Germany's largest lender is facing an array of investigations into the conduct of its employees and a jump in litigation costs was partly responsible for a surprise 1 billion euro ($1.37 billion) fourth-quarter loss that has heaped more pressure on Anshu Jain and Juergen Fitschen.
"We know that here we have something to prove to you," Fitschen told reporters at the bank's annual news conference in Frankfurt. "We have realized that the reputational risk has become more and more significant."
Deutsche Bank paid about 2.1 billion euros in fines in December, but fresh investigations - including one into possible manipulation of the $5.3 trillion-a-day foreign exchange market - have led analysts and investors to forecast an additional 1.4 billion to 2 billion euros in settlement costs for 2014 and 2015.
The bank has moved to shake up corporate practices, particularly at its investment banking operations in London and New York, turning down deals viewed as too risky, deferring bonuses for dealers and giving them less leeway on trades.
Jain admitted that the more cautious attitude had lost Deutsche business but said he was happy to pay that price and was confident that most of the litigation problems would be sorted out this year.
"We are hopeful that towards the end of 2014 we will have the bulk behind us," he said.
The ability of the duo to oversee the cultural overhaul has met with skepticism in some quarters, given that Indian-born Jain once headed the investment bank at the centre of many of the current tribulations and German-born Fitschen has become embroiled in an investigation into tax evasion. Continued...