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Hermes EOS engages with Deutsche Bank on strategy and control and compliance

Ahead of the Deutsche Bank annual general meeting on Thursday 23 May 2019, Roland Bosch, Senior Engager for Hermes EOS at Hermes Investment Management, highlights the continuing questions about Deutsche Bank’s strategy and its control and compliance functions, and outlines Hermes EOS’ voting recommendations.

  • Hermes EOS has had extensive engagement with Deutsche Bank since 2009 and has raised concerns regarding the apparent lack of an implementable value-creating strategy in previous shareholder meetings
  • Hermes EOS welcomes the improvements that Deutsche Bank has made to its control and compliance functions in recent years, however does not think that there has been enough focus and investment in this area and believes that more needs to be done
  • Despite continued concerns, Hermes EOS acknowledges the progress the Management Board made in 2018 under the new CEO and considers a vote against the discharge as counterproductive

Strategy and performance

“We acknowledge the progress the Management Board has made under the leadership of the new CEO, Christian Sewing, in delivering on key 2018 targets, most notably with regard to costs, the Postbank integration and returning the company to profitability. The company now has a reasonably robust balance sheet, as evidenced by high core equity and liquidity ratios versus peers. However, the Management Board has yet to convince us that it has a value-creating strategy for Deutsche Bank.”

Control