Reuters: Financial Services and Real Estate: UPDATE 2-Deutsche's Ackermann bows out with euro warning

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UPDATE 2-Deutsche's Ackermann bows out with euro warning May 31st 2012, 16:40 Thu May 31, 2012 12:40pm EDT * CEO warns of unwillingness of some euro zone states to reform * Ackermann hands over to Co-CEOs Fitschen, Jain * Protesters rap, spill sewage, dress in national-colours spandex (Adds additional comments from Ackermann, and supervisory board chairman) By Edward Taylor FRANKFURT, May 31 (Reuters) - Josef Ackermann launched a veiled attack on Greece and the risks its instability posed to the euro zone and economic growth as he bowed out as Deutsche Bank boss on Thursday at a shareholder meeting where anti-bank protestors spilled sewage. Around 7,000 people, or 34 percent of Deutsche's common equity, were represented at Frankfurt's fair and exhibition centre to witness Ackermann's last appearance before handing over to co-chiefs Anshu Jain and Juergen Fitschen. Investment banking star Jain kept a low profile, pulling an iPad from his black nylon backpack before putting on a pair of black headphones and leaving the stage to Ackermann, who acknowledged the standing ovation from shareholders. The bank even intercepted questions directed at Jain, asking whether he speaks German. Clemens Boersig, supervisory board chairman, said Jain was learning the language of Wagner, Goether and Schiller, but asked shareholders to be patient given how difficult it is to learn German properly. Jain and Fitschen, who between them have more than 40 years experience at the bank, are expected to outline details of their strategy from June 1 onwards, when they formally take over. Ackermann was bearish about the outlook for his industry as he bade farewell to the bank after a decade as chief executive, and fired a parting shot at Greece and other euro zone countries whose reluctance to embrace reforms was, he said, contributing to the crisis engulfing the region. "In looking ahead we must exercise caution. Economic conditions, debt levels and the lack of will to carry out reforms in a few countries of the euro zone continue to give rise to concern," Ackermann, clad in a red tie and grey suit, told shareholders. "With geopolitical uncertainties, this could impact the recovery of the global economy over the course of the year. Against this background and the ongoing regulatory debate, financial market activity remains muted," Ackermann said. During Ackermann's reign Deutsche transformed itself from being heavily dependent on corporate Germany into a global lender with investment banking, wealth management and retail banking operations. Deutsche's more international footprint and its focus on investment banking prompted fears the bank could neglect its German roots, a factor which led to the appointment of German corporate banker Juergen Fitschen to work alongside India-born investment banker Jain. The bank's expansion into the United States also brought with it a raft of lawsuits tied to subprime assets, a legacy which Ackermann described as "the price you pay for doing business there." RAP SONG AND SEWAGE Ackermann said Deutsche was by no means more heavily involved in legal disputes than peers, and that it was vital to have a presence in the United States to be a global competitor. Outside the fair and exhibition centre, activists from anti-globalisation group Attac clad in black, red and gold full-body nylon suits - the colours of Germany's flag - protested against Deutsche's trading of commodities and role in global finance. Markus Dufner, a spokesman for the association of critical shareholders, said: "Deutsche Bank must work towards stopping speculation in raw materials such as food." Two protestors with grey suits and slicked back hair performed a rap song, "Am I a fat pig banker or should I let it lie?," before a long trail of sewage was emptied in front of the entrance. Inside, Ackermann tried to remain upbeat, reminding shareholders that Deutsche Bank had come through the financial crisis without taking state aid and underlining the "high quality" of Deutsche's business model. Deutsche's market value is now greater than the combined worth of rivals Commerzbank, the now defunct Dresdner Bank and Unicredit put together, Ackermann said. The bank's share price is far off the 118 euros seen in good times, lingering at around 29 euros a share in Thursday trading, a factor which is down to changed market conditions, he added. "The financial crisis and subsequent sovereign debt crisis have once and for all fundamentally changed the framework conditions, especially for European banks," Ackermann said. The 64-year-old Swiss executive, who had attempted to install former Bundesbank official Axel Weber and chief risk officer Hugo Baenziger as Deutsche chiefs, was relatively sparing with praise for the new leadership duo. "My successors, Juergen Fitschen and Anshu Jain, together with their colleagues on the management board and group executive committee, and the supervisory board, can build on what we have achieved together," Ackermann said, adding "They have all my good wishes, not least as a shareholder." German industry chiefs welcomed the elevation of Fitschen, who has worked as head of regional management at Deutsche. "It is vital that Deutsche Bank, which still has a considerable focus on financing the real economy, maintains this focus," said Hannes Hesse, executive director of German Engineering Federation VDMA. "That's why we are particularly glad that it's a co-head structure," Hesse said, adding he felt Fitschen stood up for the 'real economy'. Matthias Wissmann, head of Germany's Association of the Automotive Industry VDA said the bank, being Germany's largest lender, had a particular responsibility for supplying the real economy with loans. "We hope the leadership change will result in setting a good example for behaviour which serves the overall economy," he said. Deutsche has tried to placate sceptics by emphasising a more conservative approach in investment banking, and by backing the expansion of retail banking and wealth management as a "second pillar." (Editing by Mark Potter) Link this Share this Digg this Email Reprints

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