Frankfurt: Deutsche Bank AG named Christian Sewing to replace chief executive officer John Cryan after less than three years amid mounting questions about the future direction of Europe’s largest investment bank.
Sewing, a lifelong Deutsche Bank employee, will take over with immediate effect, the lender said in a statement from Frankfurt late Sunday. Garth Ritchie was promoted to sole head of the securities unit and will become a deputy CEO, along with chief administrative officer Karl von Rohr. Cryan and Marcus Schenck, who was co-deputy CEO with Sewing, are leaving the bank.
The appointments follow weeks of intense speculation about the bank’s leadership that forced Cryan to say publicly he was committed to the role while the chairman raced to find an agreement with shareholders regarding a potential successor. The supervisory board wasn’t unanimous in adopting some of the measures proposed by Achleitner, according to people familiar. A particular sticking point was the proposed leadership change at the investment bank, one person said.
“We need a new execution dynamic in the leadership of our bank," Achleitner said in a statement thanking Cryan for his service.
Deutsche Bank has seen three top leadership appointments in six years amid pressure from investors to improve profitability and reverse a share slump. The strategy of Germany’s biggest lender and how big a role it still wants to play in US investment banking is still a matter of contention. Cryan reduced risk and settled billion-dollar legacy misconduct cases, but failed to restore revenue growth despite raising fresh capital.
Sewing, who joined Deutsche Bank in 1989 as an apprentice, was most recently in charge of the unit overseeing commercial and retail banking as well as wealth management. He won plaudits for successfully negotiating job cuts in the German retail unit with the influential workers’ councils, implementing the agreement on schedule and without a strong media backlash.
Sewing also headed Deutsche Bank’s internal probe into its role into alleged money laundering at the bank’s Russian unit, the so-called mirror trades, which led to the lender shuttering its securities unit in the country.
Frank Strauss, who ran the private and commercial bank jointly with Sewing, will become sole head of that unit.
Ritchie, a two-decade veteran of the bank who oversees all trading operations, had been weighing options about his future, people said last week. He joined Deutsche Bank in 1996 and rose through the ranks of its equities-trading division to become sole head of that business in 2010.
Deutsche Bank’s revenue from trading stocks and bonds, its biggest single source of income, has tumbled 32% since the end of 2015, triggering concern among investors.
Schenck, who co-led the investment bank with Ritchie, didn’t want a position in the new management team and informed the board before Easter that he planned to leave, Deutsche Bank said.
“We very much regret Marcus Schenck’s decision and thank him for his contribution in a crucial period for our bank," Achleitner said.
Over recent weeks, Achleitner intensified a search for a successor. Discussions focused on a leader who speaks German and who works well with regulators, people familiar with the matter said. Sewing, along with Schenck and chief financial officer James von Moltke, had been seen as the top internal contenders, while the bank and its backers have also reached out to external candidates including Bank of America Corp.’s Christian Meissner and ex-JPMorgan Chase & Co. executive Matt Zames, people familiar with the matter said last week.
Achleitner broke off his vacation to meet with stakeholders the past week to discuss his next move, people familiar with the discussions have said. The run of CEOs and strategy changes since he became chairman in 2012 has also led some analysts and investors to question Achleitner’s responsibility.
In recent days, investors have expressed mixed views on Cryan and who should replace him. At least two key investors have been pushing for his ouster, while another has signalled it won’t stand in the way if Achleitner removes him, said people familiar.
Cryan, then a supervisory board member himself, took over in mid-2015 with a mandate to stabilize and clean up the company. Just over a year ago he named Schenck and Sewing deputy co-CEOs as part of the company’s latest strategy overhaul. Bloomberg