Germany’s biggest lender reportedly plans to withhold millions in bonuses for former board members and demand the repayment of existing bonuses. The move comes as the bank is still struggling to stay afloat.Germany's ailing Deutsche Bank is looking into halting millions in euros in bonus payments to six top executives and demanding the repayment of bonuses it has already paid out, a report says.
The Reuters news agency, citing financial insiders, said the bank was seeking legal advice as to whether it can demand bonuses be paid back. It said lawyers had already been examining the former board members' contracts for some time, to determine whether bonuses could be stopped or clawed back.
This came after the "Süddeutsche Zeitung" daily said former CEOs Anshu Jain, Josef Ackermann und Jürgen Fitschen, along with three former board members, would not be paid the bonuses, which had been awarded in the past but not yet paid out. The bank reportedly planned to first postpone the bonuses, then cancel them outright.
Jain and co-CEO Fitschen last year resigned in disgrace following a series of scandals and missed profit targets.
The largest sum would have been paid to Ackermann, who had been in charge of the lender's investment banking operations. The amount it had promised him was an eight-digit figure, the newspaper said.
Until now, employees and shareholders had borne the brunt of Deutsche's financial woes, with thousands of jobs cut and a share price that plummeted from highs of over 100 euros ($107.3) to under 10, the paper said, describing the bank's rationale in canceling the bonuses.
The news comes with what is still Germany's biggest lender undergoing emergency restructuring under boss John Cryan. The bank posted a surprising 278-million-euro third-quarter profit last month, compared to a 6-billion-euro loss for the same period in 2015.
Cryan plans to cut units and slash 9,000 jobs in a bid to improve the bank's profitability at a time of low interest rates and sluggish global growth.
But the prospect of a $14 billion fine from US authorities for its role in the subprime mortgage crisis still weighs on Deutsche Bank – despite indications the fine may end up significantly lower.