FRANKFURT (Reuters) – Deutsche Bank investors are renewing calls for it to scale back its investment bank division ahead of what promises to be a challenging annual shareholder meeting next week.

The future of Deutsche Bank’s investment banking operations has returned to the fore after the collapse of merger talks with smaller rival Commerzbank.

One major investor is trying to extract a pledge from the bank for cuts to the unit before committing to back management in a symbolic vote of confidence at the meeting, a person with knowledge of the matter said on condition of anonymity.

Another prominent investor, Union Investment, said changes in strategy were long overdue.

“Without cuts in investment banking, we believe it will not be possible to achieve targets on returns,” said portfolio manager Alexandra Annecke, who is due to address the meeting.

Deutsche Bank declined to comment.

The division generates about half of Deutsche Bank’s revenue but is also considered its Achilles heel, with European regulators fearful that it will fail the next round of stress tests in the United States.

Last week, the risk of a rebuke from shareholders at the annual meeting grew after two influential investor advisory groups – Institutional Shareholder Services and Glass Lewis – urged them to issue a vote of no confidence in Deutsche Bank’s management.

QUELLING CONCERNS

Deutsche Bank’s shares have dropped 34% since shareholders convened a year ago. On Thursday, the price was just cents above the record low of 6.68 euros set in December.

The bank’s chairman, Paul Achleitner, and top executives are speaking to investors to quell concerns of large shareholders, a common practice in the run-up to the annual meeting on May 23, said another person familiar with the matter.

But the bank is unlikely to announce any changes to its investment banking operations in the coming days, executives said.

Revenue at the division is forecast to fall to 12.5 billion euros ($14.0 billion) this year, according to a consensus of analysts. That would mark a fourth consecutive year of decline, down 34% from 2015, based on Reuters calculations.

That contrasts with a projected 6% rise in JP Morgan’s investment banking revenue to $36 billion for the same period. It far outpaces a 5% drop in investment banking revenue across the industry from 2015 to 2018, according to Coalition, which tracks banking industry performance.

Deutsche Bank and Commerzbank attributed the collapse of merger talks to the risks of doing a deal, restructuring costs and capital demands, but concerns about the investment bank loomed large, people with knowledge of the matter said.

The ratings agencies Moody’s and Fitch, which have both tagged Deutsche for a possible credit-rating downgrade, have cited troubles at the investment bank as key concerns.

Citigroup analysts said in a report this week that Deutsche had only one option: a restructuring of its investment bank.

This could mean exiting the United States, where it employs 9,000 people, and dropping out of the equities business, they said, adding that an exit would be costly and weigh on earnings.

Chief Executive Officer Christian Sewing told analysts last month that it was “non-negotiable” that the bank remain “globally relevant”, including in the U.S. and Asia.

Sewing announced plans to cut more 7,000 jobs soon after assuming office in a management reshuffle last year, including a 25% cut in equities sales and trading jobs.

(Story corrects date of AGM in 10th paragraph to May 23, not May 24)

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