Deutsche Bank co-chief executives Juergen
Fitschen and Anshu Jain admitted Thursday that mistakes had been made
which damaged the reputation of Germany's biggest bank but vowed to
press on with a major restructuring of the lender.
"Yes, mistakes were made in the past," Fitschen told the group's annual general meeting in Frankfurt.
"They weigh on us materially and - worse still - they weigh on our reputation," he said, stressing that the bank would work to regain the trust of its clients.
Fitschen joined Jain in saying that cultural change was needed both at the bank and in the financial markets.
"A profound cultural change is necessary - also in the financial sector as a whole," Fitschen told the bank's shareholders.
Fitschen and Jain took over the running of bank in June last year after the bank's former chief executive Josef Ackermann stepped down.
But since then, Deutsche Bank has been engulfed by a string of scandals, including claims of sales tax fraud involving a carbon emissions trading scheme as well as a US investigation into questionable mortgage-backed securities deals.
The bank has also been charged as part of a probe into the alleged manipulation of the key European Libor interest rate by employees of several leading financial houses, including Deutsche.
Jain was forced at one point to halt his speech to the meeting after he was interrupted by demonstrators denouncing the bank as "crisis profiteers." Security escorted the group of protestors from the meeting.
Shares fell more than 3 per cent to 35.35 euros on the Frankfurt Stock Exchange as the meeting unfolded.
The bank believes there are good prospects for the global economy to stabilise in 2013 after the current round of turbulence.
But despite Deutsche's good start to 2013, Fitschen said it faced a difficult economic and market environment, warning of the risk that the fiscal problems confronting the United States and Europe could be underestimated.
Fitschen said "the highly optimistic mood in the financial markets indicates a risk that some market participants may be underestimating the fiscal policy difficulties in the US and the consequences of the European debt crisis."
In their speeches both Fitschen and Jain conceded that cultural changes took time to emerge.
"A comprehensive cultural change, as we aspire to, cannot simply be imposed from above," Fitschen said.
But he said: "One cannot just flick the switch. Cultural changes need to unfold step by step before they become lodged deep in the bank."
Shareholder action groups described the bank's leadership push for change as long overdue.
"We strongly welcome the move to introduce culture change, although in our view it is quite late," said Klaus Nieding, representing the German association for private investors (DSW).
Deutsche also once again rejected any moves to split up large bank operations as part of efforts to reform the financial sector.
Jain said Deutsche remained committed to the universal banking model offering financial services from global capital markets through to private customers in Germany.
"Our aim is clear," Jain said. "We want to be the leading universal bank with the customer standing at the centre."
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