BoE stress tests: all you need to know

The Bank of England has released the results of its latest round of its annual banking stress tests and its semi-annual financial stability report this morning. Used to measure the resilience of a bank’s balance sheet in adverse scenarios, the stress tests measured the impact of a severe slowdown in Chinese growth, a global recession […]

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Draghi: Eurozone will decline without vital productivity growth

It’s productivity, stupid. European Central Bank president Mario Draghi has become the latest major policymaker to warn of the long-term economic damage posed by chronically low productivity growth, as he urged eurozone governments to take action to lift growth and stoke innovation. Speaking in Madrid on Wednesday, Mr Draghi noted that productivity rises in the […]

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Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

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Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

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Barclays: life in the old dog yet

Barclays, a former basket case of British banking, is beginning to look inspiringly mediocre. The bank has failed Bank of England stress tests less resoundingly than Royal Bank of Scotland. Investors believe its assets are worth only 10 per cent less than their book value, judging from the share price. Although Barclays’s legal team have […]

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Categorized | Banks

Breuer to pay D Bank €3.2m over Kirch

Posted on March 31, 2016


Rolf Breuer, former chief executive of Deutsche Bank

Rolf Breuer, Deutsche Bank’s former chief executive, has agreed to pay his previous employer €3.2m over an interview he gave in 2002 which triggered a costly legal dispute with the estate of the media tycoon, Leo Kirch.

Two years ago, Deutsche Bank paid €928m to the heirs of Mr Kirch, who died in 2011, to settle a 12-year legal battle over the bank’s alleged role in the collapse of his media empire in Germany.

    Mr Kirch had long claimed that Deutsche Bank was in part responsible for his media group’s demise after Mr Breuer questioned the company’s financial health in a television interview with Bloomberg in 2002. Deutsche Bank always denied the allegations.

    In documents released on Thursday, Deutsche Bank spelt out the details of proposed settlements with Mr Breuer and a group of insurers that covered the bank’s top staff. The settlements must be approved by shareholders at the bank’s annual meeting on May 19.

    Deutsche Bank said that it had sought damages from Mr Breuer in relation to his interview with Bloomberg, but that he rejected the bank’s claims and held that he “did not breach his duties as management board spokesman, nor cause compensable damages as a result”.

    To resolve the dispute, Mr Breuer will pay the bank €3.2m “without precedent or acknowledgment of a legal duty due to or in connection with the Bloomberg interview”. In exchange, Deutsche Bank will drop its claims against Mr Breuer. A lawyer for Mr Breuer declined to comment.

    Deutsche Bank will also receive a net sum of €90.1m from a group of insurers that provided so-called directors and officers coverage to the German bank in the year of Mr Breuer’s interview.

    Deutsche Bank’s management and supervisory board told shareholders that a settlement would be better than seeking recourse through the courts, given the uncertainty of how such a process would end, as well as the associated costs and reputational risks.

    In a batch of documents released ahead of its shareholder meeting, Deutsche Bank also spelt out details of its new pay structure for management board members, which came into force at the beginning of this year.

    Under the new system, in addition to a basic salary and bonuses linked to the bank’s and their own performance, divisional heads will also be eligible for a bonus linked to their division’s performance.

    Deutsche said that the maximum its co-chief executive, John Cryan, could theoretically receive under this system this year would be €12.5m, while Jeff Urwin, head of Deutsche Bank’s corporate and investment bank, could earn €13.2m.

    However, as in the previous two years, Deutsche Bank will cap the amount that individual board members can earn at €9.85m. Last year, Mr Cryan, who succeeded Anshu Jain as co-chief executive in July, was paid €2.37m including his salary, pension and fringe benefits. His co-head, Jürgen Fitschen, who is stepping down this year, was paid a total of €4.5m.