Too little, too late?

As investors gathered in Frankfurt for Deutsche Bank's annual shareholders meeting on Thursday, Chairman Paul Achleitner did not mince his words.

"The public image of Deutsche Bank is heavily tarnished and damaged," he said to rapturous applause. "No one can be satisfied with the public image and share price performance."

Achleitner was addressing concerns over a string of costly scandals that have left the lender shouldering hefty litigation and settlement fees. Those rising legal costs, as well as lagging profitability under the stewardship of co-chief executives Anshu Jain and Jürgen Fitschen, had some influential investors rebuking the duo ahead of the big meeting and on Thursday.

"We no longer have confidence in the management board," said Hans-Christoph Wirt, a director at Hermes Equity Ownership Services, threatening to vote against the actions of bank's management in a symbolic vote of no-confidence.

Tepid response

Shareholders have lamented the bank's business culture that they say cost it billions of euros in fines and left its profits waning. Jain and Fitschen kept Deutsche in the business of universal banking, making its money with everything from mortgages in Germany to derivatives in London.

A recently announced strategy overhaul did little to appease its critics. They attacked a lack of concrete detail about where Deutsche planned to stem costs and besides, they said, it was too little, too late.

When it came time for co-CEO Jain to address the audience, the reception among shareholders was tepid at best. As Jain promised to make cost savings one of his utmost priorities, sporadic "boos" were audible throughout the vast auditorium.

"Returns to you, our shareholders, have not been what we aimed for," Jain said. "We are not satisfied with the cost savings we have delivered. This will be a top priority in the coming years."

Management reshuffle

To achieve those savings and turn around Deutsche Bank's stock performance, which has been the worst of any major bank in the last three years, the lender announced a management reshuffle the night before the meeting.

The shifting of top managers' duties was seen as empowering Jain as it charged him with cutting an additional 4.7 billion euros ($5.2 billion) in costs and making him responsible for the bank's strategy and organizational department.

The global transaction banking business that once fell under Jain's purview will go to Stefan Krause, who is stepping down as chief financial officer. Fitschen will also relinquish control of the bank's non-core operations unit.

Fitschen is currently on trial in Munich, where he has to appear once a week to defend himself against allegations of perjury stemming from a trial over the dissolution of the Kirch media empire. That trial, said Klaus Nieding, head of the German small shareholders' association DSW, "evokes more images of Palermo than Düsseldorf," referring to the seat of the Sicilian mafia.

The last-minute announcement of the bank's overhaul plans were not enough to convince some skeptical investors, who questioned the lender's track record on savings and wondered why they should support Deutsche keeping Jain and Fitschen in the top spots when they were the ones behind the bank's recent financial plight in the first place.

"Instead of a big bang that was expected," Nieding said, "you present to us a small bang with unclear goals and no vision."

As shareholders convened in Frankfurt, another scandal was brewing in Moscow. Several traders at one of Deutsche's Russian subsidiaries were reportedly suspended over allegations of laundering hundreds of millions of euros. The names of the traders were not released, but the German banking regulator had been informed of the accusations, according to a leading German business journal Manager Magazin.