Germany`s largest lender Deutsche Bank purged its leadership on Sunday, appointing Briton John Cryan as chief executive to replace Anshu Jain in the latest shakeup by a European bank following the financial crisis.
Deutsche Bank has struggled to restore an image tarnished by a raft of regulatory and legal problems which include probes into alleged manipulation of benchmark interest rates, mis-selling of derivatives, tax evasion and money laundering.
Barclays, Credit Suisse and UBS have all gained new leaders since the crisis hit in 2007-8.
The German lender presented a radical management shakeup on May 21 in a last ditch attempt to restore confidence in its management, but some investors demanded more changes.
Cryan, 54, has been on the bank`s supervisory board since 2013 and was a former chief financial officer of UBS. He will replace co-CEO Jain, who will resign on June 30, and become the sole CEO when the other co-CEO, Juergen Fitschen, steps down next year, the bank said.
Cryan said there was work to be done. "Our future will be defined by how well we deliver on strategy, impress clients and reduce complexity. I look forward to beginning this work on July 1,” he said in a Deutsche statement announcing his appointment.
Supervisory board chairman Paul Achleitner said Cryan, who was president for Europe at Singaporean investment company Temasek from 2012-14, was the right person at the right time.
"John is not only a seasoned banker with extensive experience in financial matters but also espouses the professional and personal values required to advance Deutsche Bank and Strategy 2020," he said.
The decision by Jain and Fitschen to step down demonstrated their commitment to putting the bank`s interests ahead of their own, Achleitner said, praising their contributions.
Cryan will take power at an awkward time, after the bank`s new strategic plan was roundly criticized by investors as too little too late.
“A lot of detail is still needed on it," said Chris Wheeler, bank analyst at Atlantic Equities in London. "Does the new person say they want to review it or say it`s fine ... It`s a massive job still to do. It`s one of the world`s biggest investment banks and Germany`s national champion."
Jain landed the top spot at Deutsche in 2012 after the investment banking division he ran consistently delivered up to 85 percent of group profit and frequently outperformed peers.
But tougher regulatory requirements and litigation, including a $2.5 billion fine to settle allegations that Deutsche traders rigged benchmark interest rates, took the shine off a division often referred to internally as "Anshu`s army".
Making Jain directly responsible for cutting Deutsche Bank`s costs by 4.7 billion euros ($5.2 billion), selling its Postbank retail business and paring back its investment bank put huge pressure on the executive.
Fitschen was hired as co-CEO to maintain the bank`s German profile but his ability to sell the group`s strategy to domestic shareholders has been impaired by his own legal problems.
He is required to appear every week at a criminal court in Munich to defend himself against allegations that he misled investigators in a dispute with the heirs of the Kirch media empire.
Gerhard Schick, the spokesman for financial matters for Germany’s Green party said the shakeup finally gave Deutsche Bank a chance for a fresh start.
"The current bosses were tied too closely to the problems for them to represent a change of corporate culture. This new start should have been done when (former CEO) Josef Ackermann left," he said.
"The decisions back then have led to a couple of lost years for the bank. The new management needs to clean up, particularly in investment banking.”
