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Deutsche Bank knows a thing or two about creating negative headlines. With its ongoing legal proceedings in Europe and the US and looming financial threats, Germany's largest lender has enough on its plate without also having to worry about polishing its tarnished reputation.

When Anshu Jain and Jürgen Fitschen took office a year ago, the co-leaders promised a cultural change at the institution. But have any advances been made?

Long list of transgressions

Deutsche Bank is used to protests, for instance against its trading activities involving arms-producing companies and food price speculation. At a shareholder meeting on May 23, investors also vociferously vented their anger. Deutsche Bank had to make provisions to the tune of 2.4 billion euros ($3.1 billion) to prepare for possible litigation costs, just to be on the safe side.

The lender has seen a series of scandals, including claims of sales tax fraud involving a carbon emissions trading scheme and a US investigation into questionable mortgage-backed security deals. As the result of a probe, the bank has also been charged for allegedly manipulating the key European Libor interest rate by employees from a number of financial houses. There was also that armed police raid at the lender's headquarters in Frankfurt, resulting in media coverage that didn't particularly enhance the bank's image.

No overnight change

Months ago, the two executives wrote to employees saying they would do all in their power to come to terms with past mistakes. "Comprehensive cultural change, to which we aspire, cannot be ordered from the top," Fitschen said at the shareholder meeting. "Cultural change has to be brought about step by step in order to be sustainable."

For shareholder Udo Lanz, progress on the issue has appeared too slow. "Change isn't happening right now," he said. "There's much talk, but deeds have yet to follow."

Klaus Nieding, of the German Association of Private Investors (DSW), is also hoping for change sooner rather than later, and he deplores the scandals that have surrounded the bank. The manipulation of interest rates is "equal to printing fake money and distributing it," he said.

First steps in the right direction

Yet, Deutsche Bank was able to work out a new remuneration model which was approved at the recent shareholder meeting. The lender views the scheme as a milestone, because it gives greater weight to softer factors such as customer and employee satisfaction when calculating bonuses. Moreover, bonuses are now capped and are paid out in a staggered fashion over many years.

Deutsche Bank will eventually be judged by it own targets. Hans-Peter Burghof, chair of the banking and financial services program at Hohenheim University, is in favor of giving the lender a chance to advance, because "we need this bank."

"It's the only proper internationally-positioned German bank, and it's very important for the German industry."

First speech in German

Much of the bank's troubles have their origin in the past and in its high-risk investment banking in particular, a segment formerly under Jain's control. Until recently, he didn't think the bank needed to change.

At the shareholder meeting, however, he delivered his first address in German, an event that had long been anticipated. At least on this account, it seems cultural change has kicked in.