One for Dennis

DANIEL.DAVIES at flemings.com DANIEL.DAVIES at flemings.com
Fri Jun 9 08:10:10 PDT 2000


Reuters story, quite interesting re. European and American capitalism . . . .

By David Crossland

FRANKFURT, June 9 (Reuters) - Deutsche Bank AG <DBKGn.DE> shareholders warned Chief Executive Rolf Breuer on Friday that he may be ceding too much power to U.S. and British investment bankers.

Shareholders attending the annual general meeting said the collapse of Deutsche's merger with Dresdner Bank AG <DRSDn.DE> in April had created the impression that control was slipping out of the hands of Deutsche's traditional commercial bankers.

"I would like to know whether Deutsche Bank in future will be run from Frankfurt or London," said Klaus Nieding, managing director of shareholder lobby group DSW. "One gets the impression that investment banking is pulling the strings."

Breuer, addressing the bank's annual general meeting, denied that the merger deal had been scuppered by Deutsche investment bankers. "That is total nonsense," he said in response to a shareholder's question.

Dresdner pulled out of the merger after Deutsche, reportedly at the insistence of London-based investment banking specialists, demanded that Dresdner sell its Kleinwort Benson unit as part of the deal.

Breuer was speaking one day after two senior U.S. investment bankers were appointed to the management board in a move seen reinforcing the growing role of that division, which last year accounted for 54 percent of group profits and is driving profit growth this year.

TOO MUCH ENGLISH SPOKEN

Edson Mitchell and Michael Philipp, both at Deutsche Bank since 1995 and both former executives of Merrill Lynch, have moved up to the board to succeed Ronaldo Schmitz and Michael Dobson respectively.

Mitchell will run Deutsche's Global Equities and Global Markets businesses, while Philipp will take charge of asset management.

Mitchell and management board member Josef Ackermann, who heads investment banking on Deutsche's nine-member board, were reported to have been instrumental in blocking the Dresdner deal.

Shareholder criticism of the merger collapse was relatively muted following two months in which Deutsche has reported strong profit growth and repeatedly insisted it can flourish on its own.

But in a further sign of unease at the growing influence of Anglo-Saxon culture at Germany's premier bank, shareholders have attacked its increasing use of English language terms in its German language publications.

"The title of our annual report 'Results 99' and the number of Anglicisms used in it have attracted some criticism," Breuer said in his speech, to a ripple of applause from shareholders.

Breuer, himself an Anglophile, has pushed Deutsche's expansion into investment banking and likes to pepper his speeches with English terms such as "shareholder value" and "equity culture."

Deutsche's management board meetings are now conducted in English. Asked this week whether no German was spoken at all during the meetings, Breuer, speaking in English, said "So What?"

((Frankfurt Newsroom, +49 69 756525, frankfurt.newsroom at reuters.com))

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