FRANKFURT (Reuters) - Deutsche Bank (DBKGn.DE) on Friday appointed here former German government minister Sigmar Gabriel, who once criticized the lender for a business model built on speculation, to its supervisory board.
Deutsche Bank, reeling from a series of scandals and years of losses more than a decade after the onset of the global financial crisis, is seeking to repair relations with Berlin.
Gabriel, regarded as a proponent of strong European and transatlantic ties, has served as foreign minister, economy minister and environment minister.
The former head of the Social Democratic Party (SPD) replaces Juerg Zeltner, who has stepped down after regulators rejected his appointment because of a conflict of interest.
Deutsche Bank’s chairman Paul Achleitner proposed Gabriel for the post, two people with knowledge of the matter said, speaking on condition of anonymity.
Achleitner described Gabriel as a “dedicated proponent” of Europe and transatlantic relations.
“We are experiencing a challenging geopolitical, economic and social era in which a global bank has to face completely new expectations and demands,” Achleitner said in a statement.
Deutsche Bank is in the midst of a major overhaul. After failing to merge with rival Commerzbank (CBKG.DE) last year, it announced plans to close some businesses, revamp its management board, and cut its workforce by 18,000 employees.
The bank has said it expects to post another annual loss for 2019 when it reports figures on Thursday.
Investigations, such as those by the U.S. Department of Justice into money laundering affairs, have weighed on the bank.
In 2016, Deutsche Bank faced a multi-billion euro fine for its role in the U.S. mortgage crisis, causing concern among regulators, investors and politicians about the bank’s viability and the need for a possible bailout. Hedge funds placed bets against the bank.
Gabriel said at the time: “I didn’t know whether to laugh or cry that the bank, which has made speculation its business model, is now declaring itself a victim of speculators.”
In a statement on Friday, Gabriel said Deutsche “has the opportunity and the responsibility to help shape the future of the German and European economy. I want to play a part in this.”
Gabriel’s ascension to the board follows questions about Achleitner’s tenure. Last year, Qatari investors were putting Achleitner under pressure to leave before his term ends in 2022, after he botched an attempt to place on the board their envoy, Zeltner.
Gabriel has not been appointed to eventually succeed Achleitner, however, three people with knowledge of the matter said.
Klaus Nieding of the shareholder lobby group DSW questioned whether Gabriel was a good choice.
He would have preferred someone with “more financial experience who could advance the bank in terms of content,” he said.
Other investors praised Gabriel’s political connections.
“This helps the bank’s strategy, which is increasingly focused on Germany, and the improvement of its tarnished public image,” said Ingo Speich, head of sustainability and corporate governance at Deka Investment, a shareholder in the bank.
Reporting by Tom Sims and Patricia Uhlig; editing by Thomas Seythal, Michelle Martin and Barbara Lewis