Deutsche Bank’s Anshu Jain to lead strategy as 3 deputies exit3 min read . Updated: 21 May 2015, 09:46 PM IST
Jain takes over the strategy and organizational development unit that had reported to Stefan Krause
Milan: Deutsche Bank AG, hours before its annual investor meeting, gave co-chief executive officer Anshu Jain direct oversight of strategy after last month’s overhaul to boost returns failed to win over investors.
Jain takes over the strategy and organizational development unit that had reported to Stefan Krause, the Frankfurt-based bank said late Wednesday in a statement. Krause, who is also stepping down as chief financial officer, will assume responsibility of the global transaction banking business from Jain and the non-core operations unit from co-CEO Juergen Fitschen.
Alan Cloete, co-CEO of Asia Pacific, and Colin Grassie, CEO of the UK, are leaving the firm, as is Rainer Neske, the head of the private and business clients division.
Jain and Fitschen face a showdown at the annual general meeting on Thursday as some of the company’s largest shareholders prepare to vote against management. Some investors question if the co-CEOs’ plan to cut costs will succeed after Germany’s biggest bank failed to meet its previous targets, while the expense of settling investigations into alleged misconduct mounts.
“We welcome some of the changes that are being made," Hans-Christoph Hirt, director at Hermes Equity Ownership Service, an adviser to institutional investors, said in an interview. “But our question will be, is that really enough to address the concerns we have?"
Hermes will vote against approving actions of Deutsche Bank’s management at the shareholder meeting. About 20% of the investors won’t back the board, Hirt said.
Shares fell 0.5% to €29.51 as of 10:00 am in Frankfurt, valuing the bank at about €40.7 billion ($45 billion).
The bank’s shares have posted the worst performance among global peers since Jain and Fitschen took the helm amid concerns about rising legal costs, weak capital buffers and low profitability. Since the bank announced the strategic overhaul the stock has dropped 6.5%, compared with an 0.8% gain in the STOXX Europe 600 Banks Price Index.
Deutsche Bank last month was ordered to pay a record $2.5 billion fine and fire seven employees to settle US and UK investigations into its role in rigging the London interbank offered rate, or Libor. The firm said at the time that investigations found no current or former management board member to have been involved in or aware of the misconduct.
Cloete ran the global finance and foreign-exchange units before taking the Asia post and joining the firm’s group executive committee in 2012. Grassie, as UK CEO, was responsible for managing the bank’s relations with that nation’s Financial Conduct Authority.
From 2003 to 2011, Deutsche Bank traders regularly asked rate submitters to make submissions that would benefit their trading positions, the Justice Department said in last month’s settlement of Libor rigging. The FCA criticized the bank for “unacceptably slow and ineffective response" to questions and repeated “false, inaccurate or misleading" statements.
Cloete had informed Jain of potential irregularities related to Libor in June 2011, the bank said in 2013. The firm planned to review whether to punish senior employees including Cloete for roles in the scandal, a person with knowledge of the matter said in January of 2014.
Grassie also is on the 22-member group executive committee. The panel, established in 2002, comprises the members of the management board, and senior representatives from regions, businesses and infrastructure operations appointed by the board.
Christian Sewing, who is responsible for the firm’s legal affairs, will succeed Neske. Deutsche Bank announced in October that Marcus Schenck will succeed Krause as CFO after the shareholder meeting.
Chief Operating Officer Henry Ritchotte will also become the firm’s chief digital officer to oversee banking technology across businesses. Fabrizio Campelli, head of group strategy, will become deputy COO under Ritchotte and assume additional responsibility for strategy and organizational development, reporting to Jain. Bloomberg