Anshu Jain resigns, Deutsche Bank names John Cryan as CEO3 min read . Updated: 08 Jun 2015, 12:23 AM IST
Cryan will replace Jain from 1 July and become the sole CEO when Fitschen steps down next year
Cryan, the former chief financial officer at UBS Group AG, will run the firm alongside Fitschen, after Jain leaves on 30 June, the company said in a statement on Sunday. The 54-year-old, a member of Deutsche Bank’s supervisory board, will be sole CEO after Fitschen departs next May.
Jain, 52, and Fitschen, 66, were under pressure to persuade investors a strategic plan announced in April would succeed after Germany’s biggest bank failed to meet previous targets in the face of mounting legal costs. Top managers received the lowest approval from shareholders in at least a decade at last month’s annual meeting.
“The supervisory board drew consequences from the voting disaster at the annual general meeting," Ingo Speich, a money manager at Union Investment Privatfonds GmbH in Frankfurt, one of Deutsche Bank’s top 20 investors, wrote in an emailed statement.
“The decision for John Cryan isn’t surprising."
It’s an abrupt reversal for Jain, who helped build Deutsche Bank into Europe’s biggest investment bank and a leader in debt trading. He and Fitschen, who replaced Josef Ackermann in 2012, struggled to adapt to toughening rules that made some activities less profitable, while dealing with a barrage of legal issues.
The bank was fined $2.5 billion in April by regulators in the US and the UK for manipulating interest-rate benchmarks. It still faces potential fines related to foreign exchange, mortgage- and asset-backed securities and precious metals dealings, and is under investigation for alleged US sanctions violations, according to the 2014 annual report.
Deutsche Bank is also conducting an internal probe into possible money laundering by Russian clients that may involve about $6 billion of transactions over more than four years, people with knowledge of the situation said last week.
“It has been 20 years this month since I came to work at Deutsche Bank and it has been an extraordinary time," said Jain in the statement. “We have boosted capital, reduced exposures and risk, and invested significantly in technology, control and compliance capabilities."
Over the past month, Jain came to the conclusion that Deutsche Bank needed a five-year commitment from the CEOs to deliver on the strategic overhaul and consequently decided a change of leadership would be better for the firm, said a person with knowledge of the situation.
Fitschen didn’t want to continue leading the firm and agreed to resign with Jain, said the person, who declined to be identified because the discussions are private.
Jain’s departure reflects a wider shift at Europe’s biggest banks away from a reliance on fixed-income trading, which helped fuel profits before the financial crisis and which has come under the heaviest regulation in the ensuing years. CEOs with trading backgrounds at UBS, Barclays Plc and Credit Suisse Group AG have given way to successors with backgrounds in banking or insurance.
Fitschen, who was raised in northern Germany, joined Deutsche Bank in 1987 and is the longest-serving employee on its management board.
The two men won’t get paid for the remainder of their contracts, which were to run until 2017, according to people with knowledge of the matter.
Cryan, a British native, is a former mergers and acquisitions banker specializing in financial services deals. He became CFO of UBS when the Swiss bank was saddled with losses related to the collapse of the sub-prime mortgage market in the US.
“UBS was in a big crisis and Cryan managed it well," Dirk Becker, a Frankfurt-based analyst at Kepler Cheuvreux, said of his tenure at the biggest Swiss bank. “His communication was also very good", winning points with investors, Becker said. Bloomberg