Deutsche Bank’s (NYSE:DB) Chief Executive John Cryan has found himself back on the defensive as investor patience continues to wear thin. So far, the group’s latest turnaround and recovery plan has not garnered the desired traction, leading to speculation of his replacement by an external candidate.
Cryan has been one of the more embattled CEOs in recent years with the German lender facing dire straits. The past two years has seen Deutsche Bank dramatically reduce its global staff, at one time portending upwards of thousands of job cuts.
Weakened by a number of debilitating settlements and profit woes, the group has been one of the most active banks in terms of personnel moves and cost-cutting measures. In 2017, key divisions have been winnowed while other units have been restructured entirely in specific new units, including its global markets unit.
An €8.0 billion ($9.4 billion) cash call earlier this year also helped shape Deutsche Bank’s restructuring plan, though this has thus far not achieved its intended results. Consequently, three of the ten largest stakeholders in the bank have opened the door to a potential replacement of Mr. Cryan, targeting a window of a few quarters, per a Bloomberg report.
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Heightened scrutiny over Cryan’s performance by investors is nothing new, with share prices diving off of earlier highs during the decade. For his part, Mr. Cryan has tried to help allay investors’ biggest fears, ultimately placating them in a series of improved quarters and financial results earlier this year. The improved revenues and profits even led some to wonder if Cryan himself was finally off the hot seat.
Looking ahead, May 2018 could loom as a key month for Mr. Cryan, with the group’s shareholder meeting then serving as a key barometer for his long-term stance with the lender. Revenues have been a lingering concern for Cryan, who despite massive cost-cutting efforts has been unable to alleviate this burden.
For this and a variety of other reasons, Deutsche Bank’s share prices have continued to oscillate, a disturbing trend for an already anxious client base. Overall, the trend is skewed negative, a revelation that many key investors have grown frustrated with on account of such widespread cuts.
Past regulatory scandals and other debilitating fines that have continually eroded profits have also haunted the bank. Rather than a few large fines, Deutsche Bank has managed to rack up millions in a string of settlements and legal actions in 2017 that has done little to help instill confidence or profits.
Looking ahead, Mr. Cryan will be hoping for a big boost from the bank’s Q3 results later this month. Any setback could potentially pave the way for his replacement in 2018.