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Deutsche Bank executives for their most disputed shareholder meeting so far



A sign stands above the entrance to a bank in Deutsche Bank AG in Frankfurt, Germany, Monday, July 4, 2016.

Krisztian Bocsi | Bloomberg | Getty Images

Leaders of Deutsche Bank can expect an explosive meeting with shareholders on Thursday, as the bank's tumbling stock price and increasing backlog of scandals put the board in the spear line.

The challenged German lender saw that the stock price hit a play low on Thursday, almost 5% since the beginning of the year. On Monday, UBS downgraded its stock into a "sell" rating from "neutral" and lowered its target price from EUR 7.80 to EUR 7.70.

Shareholders' Complaints

This week's reports suggested that major shareholders will drive the removal of Deutsche chairman Paul Achleitner before his maturity maturity in 2022. But CNBC sources said Tuesday that the bank expects Achleitner to retain its premiership by about 60 % shareholders.

Deutsche is also facing pressure to trim its investment banking division after the merger of merger negotiations with domestic rival Commerzbank. Investment Bank (IB) is the specific division that refers to capital injections for other companies, governments or entities.

UBS downgrade noted that Deutsches IB would have been a "main recipient" of the Commerzbank deal, which helped to reduce financing costs and spreads and balance the overall profile.

Inviting shareholders Proxy Institutional Shareholder Services (ISS) has urged its members to vote against "emptying" Deutsche's board of directors, the declaration of trust under the German articles of association. It argued that the shareholders had been borne by monetary and rumor damages caused by a series of scandals, mainly as a result of the bank's failure to maintain money laundering controls.

Deutsche has been the source of very negative publicity in recent years ̵

1; from settlements with the US Justice Ministry, to management updates, weak income, constant restructuring, merger speculation and steep share price falls.

The bank defended its risk and control system on the grounds that it had "substantially improved" over the past three years but the Russian cloud overhanging the bank has only diminished in recent weeks after the reports that it prevented the flagging of suspicious unit transactions linked to President Donald Trump and son-in-law Jared Kushner.

Trump Agreement

The latest scandal for engulfing Deutsche Bank came after a New York Times report, Deutsche Bank's management claimed ignored rep orts from employees about transactions in 2016 and 2017 that triggered their automatic controls against illegal activity .

The transactions allegedly related to entities controlled by Trump and Kushner, but the bank strongly denied the report and said in a statement that "the suggestion that someone redistributed or dismissed in an attempt to stop concern for any customer is categorically false. "

The president's relationship with Deutsche Bank has long been a source of scrutiny. Trump sued the bank last month to block its compliance with congressional claims seeking access to his financial records.

U.S. President Donald Trump goes against journalists as he leaves the White House for a campaign experience in Pennsylvania on May 20, 2019 in Washington, DC.

Chip Somodevilla Getty Images

A federal judge in New York City on Wednesday said Deutsche Bank may reverse financial documents related to President Donald Trump and his company in response to lawsuits from two democratic led house committees.

Judge Edgardo Ramos came after a hearing where lawyers for Trump, his three older children, Donald Jr. Eric and Ivanka, and the Trump organization claimed that the cash benefits of the two banks would be crashed. An appeal against the decision is anything but firm.

Deutsche Bank was a consistent main lender for Trump's real estate business. The president doubted the cruel retreat on Monday and suggested that other banks refused to work with him because of a lack of creditworthiness, claiming that he "did not need money".

Money laundering, interest management scandals

Last month, a confidential internal memo published by The Guardian Deutsche Bank revealed that it could face legal action over the enormous Global Laundromat system used by Russian criminals with ties to the Kremlin and KGB money for the western financial system between 2010 and 2014. A spokesman told CNBC's bank "undertakes to provide appropriate information to all competent investigations."

In November 2018, the bank's office in Frankfurt was raped by German police, prosecutors and tax inspectors in a money laundering trial stemming from the Panama Papers scandal. Deutsche managers announced their fourth quarter loss in part to subsequent negative publicity.

In 2017, the bank met with a $ 630 million fine by US and UK regulators for Russian money laundering claims between 2011 and 2015. Regulators said the Deutsche control mechanisms for combating money laundering failed to detect sham value up to $ 10 billion, because they could not identify the customers involved in trade and the origin of money.

This came just two weeks after Deutsche reached a $ 7.2 billion deal with the US Department of Justice (DOJ) on the sale and merger of security-linked toxic securities in the context of the global financial crisis.

Two years earlier, Germany's flagship dealers had already received a record 2.5 billion fine for interest management as part of the Libor scandal investigation, which spans regulatory authorities on both sides of the Atlantic.

Also in 2015, after the Libor fine, the bank agreed a $ 258 million batc h settlement with US regulators to violate sanctions against a number of countries, including Libya, Syria, Iran and Sudan.

CNBC's Annette Weisbach contributed to this report.


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