Deutsche Bank boosted the power of co-chief executive Anshu Jain in a management shakeup, but shareholders dismissed the moves as insufficient and demanded more changes to restore confidence in the leadership of Germany's largest bank.
The bank re-arranged responsibilities among its top brass on the eve of its annual shareholder meeting on Thursday, putting Jain in charge of a reorganization and cost-cutting despite criticism of his performance.
"The reshuffling of chairs didn't go far enough," Hans-Christoph Hirt, a director at shareholder adviser Hermes Equity Ownership Services, told the meeting. "We no longer have confidence in the management board."
Hirt called on Chairman Paul Achleitner to take more action.
"We ask the supervisory board to further examine the construction of the management board and to pursue further changes," he said.
Rival advisory firm ISS has already recommended that Deutsche Bank investors should withhold their backing for management at the annual meeting.
Deutsche Bank has trailed rivals under the leadership of Jain and its other co-chief executive, Juergen Fitschen. Despite fallout from the financial crisis, they stuck to a costly universal banking model offering everything from mortgages in Germany to derivatives in London.
A restructuring plan unveiled last month to axe unprofitable business lines was judged too little, too late by investors, who have been calling on Achleitner to take action.
The chairman wanted to take action before the annual general meeting and, after several informal briefings in the bank, expectations had been high that changes would be decided at a three hour supervisory board meeting late on Wednesday.
"Everyone knew that something was coming," one source said.
The bank's strategic problems have been compounded by a series of scandals including a lengthy court case in Munich, where Fitschen has to appear every week to defend himself against allegations he misled investigators in a dispute with the heirs of the Kirch media empire.
Attorney Klaus Nieding, head of German small shareholders' association DSW, told the annual meeting that recent pictures of Deutsche Bank executives in criminal courts "evokes more images of Palermo than Duesseldorf" in a reference to the hometown of the Sicilian mafia.
Under the last-minute reshuffle, Fitschen cedes control of the division that is unwinding Deutsche Bank's unwanted assets to Stefan Krause, who orchestrated the bank's recent strategic review.
Jain has been made accountable for the bank's reorganisation and drive to cut an additional 4.7 billion euros in costs.
Nieding also said Deutsche's planned reorganisation, including a paring back of its investment bank and the sale of its Postbankretail unit, did not go far enough.
"Instead of a big bang that was expected ... you present to us a small bang with unclear goals and no vision."
Deutsche Bank's shares have fallen over 6 percent since the new strategy was unveiled, underperforming a 1 percent rise in the STOXX index of European banks during that period.
"I think that management changes offering a clean record and fresh ideas would be required before we see any meaningful re-rating in the share price," said Guy de Blonay, manager of the Jupiter Financials Fund.
"However, new management would require another capital increase and a significant clearing of the decks."
Krause told the shareholders' meeting that the group had no current plans to raise additional equity capital.
Krause, due to hand his chief financial officer title to fellow board member Marcus Schenck, has also been put in charge of overseeing the growing transaction banking division, an important part of the group's new strategy.
The bank will also seek to make Krause the supervisory board chairman of Postbank unit which it aims to reform before selling the unit by the end of 2016.
Deutsche's retail banking boss, a senior executive in Asia and the head of the British business are all to leave the bank.
Rainer Neske will be replaced as head of retail by Christian Sewing, who is also responsible for legal matters.
Alan Cloete, the bank's co-chief executive officer of Asia Pacific, will also leave in the near future. Before running Asia, Cloete was global head of finance and foreign exchange operations, which was the business responsible for making price submissions that formed the basis for interest rate benchmarks such as Libor.
U.S. and British authorities fined Deutsche Bank a record $2.5 billion in April over allegations its traders tried to manipulate Libor.
Britain's Financial Conduct Authority said Deutsche Bank had repeatedly misled it during its inquiry. The head of the bank's UK operations, Colin Grassie, is leaving the bank.