Deutsche to raise risk reserves again amid pending shareholder governance audit

Shareholder body DSW awaiting decision from Frankfurt court

Deutsche Bank plans to raise risk provisions “significantly” again this year to settle lawsuits and pay regulatory fines dating all the way back to the financial crisis of 2008.

It comes as Germany’s largest financial institution is still facing a potential governance audit demanded by shareholder association DSW that is still in the legal works.

Speaking at a press conference in Frankfurt yesterday (January 28), Deutsche CEO John Cryan said that while the bank had €5.5bn in reserves to deal with the legal trouble, “we expect to raise that number again so that we expedite these matters and settle the bigger cases.” Cryan declined to specify how much more was needed.

Cryan also swore better governance of the bank, saying Deutsche has learned from its mistakes and is intent on becoming “clean” again. “It’s going to take some time to change the culture, but we’ve made good progress and can already see the light at the end of the tunnel,” he said.Since 2012, Deutsche has spent close to €13bn to settle litigation and pay fines. A series of scandals led to nearly 40% of Deutsche’s shareholders voting against discharging the management team led by then CEO Anshu Jain at the bank’s annual general meeting (AGM) last May.

Jain was forced to resign, and Cryan, a former Chief Financial Officer at UBS, was brought in.

At the AGM, a motion filed by German shareholder association DSW seeking an audit of Deutsche’s governance to prevent future scandals garnered only 14% support.

But DSW took the request to a Frankfurt court to request an audit. A DSW spokesman told RI that the court had still not decided the association’s request – meaning that shareholders may still get their say.

Cryan and the other three members of the management board are receiving no bonus for 2015 – a year in which Deutsche posted a loss of €6.8bn.