FRANKFURT (Reuters) - Paul Achleitner’s nomination for a new term as Deutsche Bank chairman has split investors, with Qatar’s Sheikh Hamad bin Jassim al-Thani backing him but other shareholders reluctant to give their support, according to people with knowledge of the matter.
His nomination, announced by the bank on Monday, is problematic because some investors consider he did too little to change the bank’s culture, aligning himself with former boss, Anshu Jain, and the investment bankers many blame for Deutsche’s problems.
During his four-year tenure at the bank, its stock price has more than halved, weighed down by a string of legal issues and fines running to billions of euros.
But some investors consider that Achleitner’s departure would mean yet more uncertainty.
“The bank needs stability,” said one person familiar with the thinking of Sheikh Hamad bin Jassim al-Thani, who controls funds that have a combined stake of roughly 10 percent. “That is why Achleitner has his support.”
Two other major investors in Deutsche, who spoke on condition of anonymity, said they were skeptical about Achleitner staying on. They also criticized the timing of his nomination, which has been made while a potential U.S. fine of up to $14 billion related to the sale of high-risk mortgage debt securities is hanging over the bank.
“During his tenure, the number of staff have risen, the costs have risen and litigation costs are at a record,” Dieter Hein, an analyst from Fairesearch, said.
“Achleitner has failed. A renewed term is a slap in the face for shareholders ... he should be long gone, given this performance.”
A spokesman for the bank said that Deutsche Bank’s supervisory board had nominated chairman, Achleitner, for re-election.
The spokesman also said an internal investigation had cleared Achleitner of wrongdoing in connection with the bank’s manipulation of interbank borrowing rates including Libor, which cost it a record $2.5 billion in fines from U.S. and British authorities.
Shareholders will vote on Achleitner’s nomination for another five-year term as chairman at the bank’s annual meeting next May.
“Of course Achleitner made mistakes, such as holding onto the old leadership,” Ingo Speich, a fund manager at Deutsche shareholder Union Investment, said.
But Speich said he would nevertheless support him to avoid months of confusion that would follow his departure. “There are too many problems that have to be solved.”
Writing By John O'Donnell. Editing by Jane Merriman