The largest financial lender of Germany, Deutsche Bank (NYSE: DB) had a change of leadership recently as it appointed a new Chief Executive, Briton John Cryan who replaced Anshu Jain. The decision was taken right after Jain got more power to make changes in the structure and functions of the bank.
Deutsche Bank has been struggling to restore its image, which got ruined by a series of legal and regulatory issues. It includes a probe into supposed manipulation of standard interest rates, tax evasion, and wrong sale of derivatives as well as money laundering.
On May 21, the bank put forth a drastic management shake-up. It was the final effort to get back trust in the bank’s management. However, certain investors asked for greater changes.
Cryan: New face of Deutsche Bank
54-year old Cryan has been a part of the supervisory board of the bank since 2013. He has also served as a chief financial officer earlier at UBS (NYSE: UBS), which is a rival bank. Cryan was reported saying that the bank’s future is dependent on their ability to perform according to the strategy and winning the hearts of clients while reducing complexities. He will take on his duties from July 1, 2015.
Investors have greatly criticized the bank’s strategic plan, saying it’s either too late to make any amends or the suggested changes will be of little help to the bank. Chris Wheeler, who works in Atlantic Equities as a bank analyst, said that the strategy still requires work in terms of details.
In a letter to clients, Jefferies, a Global Investment Bank, wrote that Deutsche Bank is making a transition from being among the most untrustworthy management teams to one that is highly regarded. Market confidence regarding delivery needs to increase.
As per Jain, the person working through Deutsche Bank's strategy would have to commit to it for at least five years, which was not possible for him. He had a discussion regarding the same with Fitschen, co-CEO and they both of them decided to resign.
Jain faced shareholders’ criticism at the previous month’s AGM. He followed it up by addressing an assembly of coordinators and senior staff, giving a hint that he could be leaving soon. He was reported saying that he did not wish to curb the bank’s development and was willing to step aside for the same.