(Repeats May 19 story with no changes)
* Deutsche aims to remain a global investment bank player
* Chairman to make case for capital hike
* Deutsche culture shift to take time to complete
By Thomas Atkins
FRANKFURT, May 19 Paul Achleitner, the chairman
of Deutsche Bank, believes Europe needs a global
investment bank to support the region's companies that can
measure up to rivals in the United States.
For that reason, Deutsche on Monday asked shareholders for 8
billion euros ($10.98 billion) to help the bank keep its place
in the shrinking "bulge bracket" of big investment banks that
includes JP Morgan, Goldman Sachs, Citi and
While other European banks such as UBS are scaling
back in investment banking, Deutsche remains the only European
investment bank to have avoided wholesale job cuts and the only
one aiming to represent European companies in the capital
"Our continent is at a turning point where it needs to
decide whether it wants to belong to the champion's league of
financial markets participants," Achleitner said earlier this
Achleitner wants big, and so does corporate Germany, which
regards Deutsche Bank as a national institution that can support
the world's biggest exporter after China.
When Achleitner was at Goldman Sachs, he advised Deutsche on
its 1999 purchase of Bankers Trust, a deal that catapulted it
into the big league. But in 2000, as CFO at Allianz,
he tried to stitch the insurer into a merged Dresdner and
Deutsche Bank, a mega-deal that fell apart soon after it was
"Germany and the euro zone need a big investment bank and
you have only one left and that is Deutsche Bank," Joachim
Faber, chairman of the supervisory board of Deutsche Boerse,
said. "The business community is very aware the Deutsche Bank is
very important to Germany."
So when 57-year-old Achleitner stands before the bank's
annual shareholder meeting on May 22, he must make the case for
the capital hike and the bank's turnaround plan, which also aims
to overhaul the bank's culture after a string of scandals.
Achleitner, who joined Deutsche as head of the supervisory
board in 2012, is pressuring management to settle what the bank
calls "legacy issues" before the end of the year.
But the list of remaining cases - which includes everything
from interest rate-rigging to mortgage mis-selling - is long and
the bank's hope of clearing the decks quickly is fading.
That has cast a pall over co-chief executives Anshu Jain and
Juergen Fitschen and fuelled speculation in the German media
that one or both will not serve out their contracts to 2017.
Achleitner, who has to have alternate CEO candidates
at-the-ready, rejects the notion that he himself would grab the
"I am quite hands-on as far as supervisory board matters are
concerned (but) I do not, nor do I wish to, serve in an
executive function. This is ridiculous," he told Reuters last
Shortly after Fitschen, Jain and Achleitner took up their
jobs in mid-2012, Deutsche Bank began its big overhaul which has
included technology, structure, compensation and compliance.
But Achleitner's hardest battle is to change the bank's culture.
"The public doesn't understand anything about cultural
change," Juergen Hambrecht, former CEO of chemical company BASF
and architect of the bank's reformed compensation system, said.
"People think it's like switching on a light. But that
doesn't work. It is a fundamental change in the way the bank and
all employees see themselves."
Hambrecht, a sometimes provocative advocate of corporate
Germany and its needs, said the problem with "pre-reform"
Deutsche Bank was that it was more concerned about making money
than serving customers.
"The client was nowhere. The client wasn't important,"
Hambrecht said. "It was the individual banker himself who
mattered and the main question was, how could the bank advance
its interests, regardless of the client."
Cultural transformation at Deutsche, Hambrecht said, will
take another five to ten years to complete. "Deutsche Bank is in
fact on the right path but the past is a burden that cannot be
gotten rid of so quickly."
Two years into the revamp, the bank on Monday diluted and
delayed its original goals by one year, which means, in effect,
it will take until 2016 to get to where it wants to be.
Achleitner, also a part-time professor who often dresses
more like an academic than sharp-suited banker, has asked for
patience as the reforms take effect. "The success of a strategy
cannot be measured by quarterly results," he said.
Germany's financial watchdog Bafin recently appeared
dissatisfied with progress. It criticised the bank in a
confidential report leaked to local media. In it, the watchdog
said Deutsche failed to practice what it preached, namely,
promoting cultural change but not firing senior staff who
oversaw divisions implicated in an interest-rate scandal.
Dieter Hein, an independent equity analyst at Fairesearch,
said both Jain and Achleitner need to be replaced to clearly
show that Deutsche Bank has transformed itself.
"This cultural transformation is not credible and indeed
won't be credible in the future unless Deutsche Bank replaces
Anshu Jain and Paul Achleitner," Hein said. Both, Hein said,
were integral parts of the system that created the crisis.
But leaving aside Deutsche's cultural problems, there is
little doubt that corporate Germany and Berlin want Europe to
have a strong investment bank to protect its interests on the
Deutsche Boerse's Faber, for example, said Bafin's harsh
tone toward Germany's financial flagship should not be mistaken
for lack of support for having a big, German bank.
"There is no risk of failure. It would be suicidal for
corporate Germany," he said.
($1 = 0.7289 Euros)
(Reporting by Thomas Atkins, editing by Jane Merriman)