THE head of Deutsche Bank, Germany’s biggest bank, vowed to stay on yesterday, despite a ruling from a federal court forcing him to be retried over windfall bonuses paid to executives of Mannesmann, the German engineering and telecoms company taken over by Vodafone.

Josef Ackermann, Deutsche Bank’s chief executive, said: “The great encouragement and enormous support I have received in the last few days and weeks from Deutsche Bank’s staff, customers and shareholders has strengthened my resolve to stay at the helm.”

The bank chief executive, who was a non-executive director of Mannesmann, and five other people were cleared by a regional court last year of wrongdoing in paying departing executives of Mannesmann almost €60 million (£40 million) in bonuses just as Vodafone succeeded in taking it over.

However, the federal court yesterday overturned the ruling and said that Mr Ackermann had failed in his duty to protect Mannesmann’s interests. Klaus Tolksdorf, the lead judge in the case, said: “Such a bonus is nothing other than a waste of money and that runs against their fiduciary duty. There was no incentive to management as a result of the payments.” Mr Ackermann’s lawyers said that the ruling sent the case “back to square one”.

The decision heightened speculation that the Deutsche Bank chief executive would resign. BaFin, the financial watchdog, said that it would not push for his resignation unless there was a guilty verdict.

Despite Mr Ackermann’s defiance in the face of the federal court ruling. Rolf Breuer, the Deutsche Bank chairman, is said to be considering an eventual replacement for the chief executive. Mr Ackermann is unpopular in some quarters in Germany because he has instigated thousands of job cuts at the bank at the same time as announcing record investment banking profits.

Konrad Becker, an analyst for Merck Finck, said: “That Breuer said anything publicly at all is very unusual. He is distancing himself.”

DSW, the German shareholder association, urged Deutsche Bank to sideline Mr Ackermann. Ulrich Hocker, head of DSW, said: “Deutsche can’t really afford to have a boss who will again be in the dock for months. Ackermann is increasingly becoming a problem for the company.”

However, Deutsche Bank’s supervisory board, a group of non-executive directors, said that it retained full confidence in Mr Ackermann.

The payments to Klaus Esser, Mannesmann’s chief executive, and others were signed off by Mr Ackermann and other board members after the phone company gave up its fight against Vodafone’s €178 billion hostile bid in 2000.

Mr Ackermann knows that a retrial could tarnish the reputation of the bank that he has led for just three years and he may quit if a retrial drags on, a senior Deutsche Bank official had said before the judgment.