Good housewives clear their larders before a prolonged absence. Josef Ackermann, bowing out as Deutsche Bank’s chief in May, has done something similar. Germany’s biggest bank by assets posted a pre-tax loss of €351m in the fourth quarter, compared with €707m profit a year earlier, and miles shy of consensus forecasts approaching €1bn. But this came after a clutch of unexpected special charges – including a €144m impairment on Greek sovereign debt (now written down to a third of notional value), €380m of litigation-related expenses in the corporate bank, and writedowns of close to €550m on a couple of corporate investments. The result is a cleaner slate for Mr Ackermann’s successors – and a share price that faded to €34.
Being underwhelmed is a feeling that investors, reviewing the decade-long Ackermann era, should recognise. For all the Swiss-born banker’s elder statesman reputation and his efforts to transform Deutsche from a traditionalist domestic lender into a global banking group, the bank’s share price has fallen by more than 50 per cent of its value over this period. Even on a total return basis, the stock has lost 38 per cent, while Germany’s CDAX index has returned over 40 per cent. Alongside European banking peers, too, Deutsche’s performance is hardly stellar – better than Barclays’, for example, but worse than HSBC’s.
Of course, Mr Ackermann has had particular challenges – including tussling with Germany’s consensus-driven cosiness, and the distractions of the Mannesmann trial. Moreover, the bank weathered the 2008 crisis without state help, and expects its core tier one capital ratio under Basel III to be 9.5 per cent by end-2013. But Mr Ackermann repeatedly promised more than he delivered – such as €10bn in pre-tax profits by 2011 (actual outcome: €5.4bn). His successors, Jürgen Fitschen and Anshu Jain, need to do the opposite.
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