Jain steps down as Deutsche Bank co-CEO after record fine on lender
Former chief financial officer of UBS, John Cryan was appointed as the new CEO of the Deutsche Bank after Anshu Jain stepped down following criticism from investors.business Updated: Jun 08, 2015 15:28 IST
LONDON: Anshu Jain and his coCEO at Deutsche Bank, Jurgen Fitschen, stepped down from their positions weeks after US and UK regulators imposed a record penalty on the lender for rigging Libor rates.
The supervisory board of the bank decided at an extraordinary meeting to appoint John Cryan, 54, to the position of Co-CEO, effective July 1, 2015.
Cryan’s appointment follows the decision of Fitschen, 66, and Jain, 52, to step down, the bank said. While Jain will step down on June 30, 2015, the board has asked him to continue as consultant till January 2016.
Jain and Fitschen’s contracts were due to run through to March 31, 2017. Upon Fitschen’s departure on May 19, 2016, Cryan will become the sole CEO.
London interbank offered rate (Libor) is a benchmark rate that some of the world’s leading banks charge each other for short-term loans.
In April, the lender agreed a record-breaking $2.5 billion (£1.7 billion) penalty for its role in manipulating the Libor benchmark, with the regulators in the UK and US finding that Deutsche employees misled investigators. The penalty was the biggest in the Libor rigging scandal.
Deutsche Bank has struggled to restore an image tarnished by regulatory and legal problems, including probes into alleged manipulation of benchmark rates, mis-selling of derivatives, tax evasion and money laundering.
In a last-ditch effort to restore confidence in its leadership, the lender presented a radical management shake-up on May 21, only to face calls for Jain to resign from staff situated in its own headquarters in Frankfurt. But, some investors demanded more changes to restore confidence.
Jain landed the top spot at Deutsche in 2012 after the investment banking division he ran consistently delivered up to 85% of group profit and frequently outperformed peers. But tougher regulatory requirements and litigations took the shine off a division often referred to internally as “Anshu’s army”.
“On behalf of the supervisory board, I would like to express our gratitude for the contributions that Jürgen and Anshu have made to our bank,” Paul Achleitner, chairman of the board, said in a statement.
“Over the course of two decades, Anshu has been instrumental in founding, and then growing, many of Deutsche Bank’s leading businesses. Without his efforts, our bank today would not have achieved or sustained its global leadership. Anshu has earned a place in our bank’s history as an executive who helped to transform the bank into the global leader, rooted in Germany, that it is today,” he added.
Commenting on his journey at Deutsche Bank, Jain said: “It has been 20 years this month since I came to work at Deutsche Bank and it has been an extraordinary time. Over the past three years, I have been afforded the privilege and honour to lead this great institution together with Jürgen. In our time as the bank’s leaders, we have boosted capital, reduced exposures and risk and invested significantly in technology, control and compliance capabilities. Most significantly, we have kept our clients happy and our revenues growing while reshaping and strengthening the bank.”
“I believe that with Strategy 2020 in place, which puts the bank’s future on a strong track, it is right for the bank and for me to have new leadership at this time. I will be forever honoured to have served here, and I am convinced that the future of the bank is bright and in very good hands,” he added.
Analysts said Cryan now need to review the bank’s restructuring plan and decide how to implement it or whether to bring in an entirely different plan. “If Cryan or someone else takes over, what do they do with that plan? A lot of detail is still needed on it. Does the new person say they want to review it or say it’s fine,” said Chris Wheeler, bank analyst at Atlantic Equities in London."It’s a massive job still to do. It’s one of the world’s biggest investment banks and Germany’s national champion," he added.
(With agency inputs)