Deutsche Bank has tapped Christian Sewing as its newest Chief Executive Officer (CEO). The German lender has finally opted for new leadership during one of the most challenges stretches, notably after its third consecutive annualized loss in 2017.
The move reflects an end of an era for John Cryan, the embattled former Deutsche Bank CEO who kicked off one of the largest restructuring plans in the industry. Since late 2015, Cryan had been the primary architect behind a range of cost-cutting measures that have led to thousands of jobs cut.
While these changes did bear temporary benefits and short-term boosts to revenues, the lender could never get on track fully, ultimately forcing a change in leadership. With Deutsche Bank’s future more clouded than ever, the lender’s board decide to make the move, looking to rely on one of its own to reverse course.
Sewing steps into the new CEO role with immediate effect, having been a member of Deutsche Bank’s management board since 2015. He is no stranger to the lender, having worked at Deutsche Bank in various capacities since 1989. During his tenure, he has worked for Deutsche Bank in Frankfurt, Hamburg, London, Singapore, Tokyo, and Toronto.
The scope of his career with the lender will be instrumental in helping him manage Deutsche Bank’s global operations. Paul Achleitner, Chairman of the Supervisory Board, commented on the new appointment: “in his more than 25 years at Deutsche Bank Christian Sewing has proven himself a strong and disciplined leader. The Supervisory Board is convinced that he and his team will be able to successfully lead Deutsche Bank into a new era. We trust in the great ability of this bank and its many talents.”
Additionally, the group’s Garth Ritchie was also promoted as the sole head of Deutsche Bank’s securities unit and will now become a deputy CEO. Chief Administrative Officer Karl von Rohr. Cryan and Marcus Schenck, who was co-deputy CEO with Sewing, will part ways with the lender.
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The appointment of Sewing snaps weeks of rumors, speculation, and questions surrounding Mr. Cryan’s future. However, Cryan’s job had been under scrutiny for years, after the loss of thousands of jobs failed to kindle Deutsche Bank’s growth. As a perennial laggard, Deutsche Bank has underperformed many of its industry peers, never fully shaking off multiple scandals and fines during the Cryan era.
A capital raise and other measures under Cryan’s leadership proved ineffective, which ultimately drew the ire of shareholders looking for a new change of direction. The past couple weeks had been filled with rumors of an alleged move, with Deutsche Bank apparently seeking Mr. Cryan’s replacement.
These whispers appear to have been valid, with Deutsche Bank approaching numerous candidates. This includes Juerg Zeltner, the former head of UBS Group AG’s $1.3 trillion wealth-management unit.
As recently as last week, the former CEO of Merrill Lynch, John Thain’s name was also being floated as the newest addition to Deutsche Bank. It’s still likely that more moves will be coming over the next months, especially amidst a mountain of shareholder criticism against Paul Achleitner.
Achleitner’s future is unclear as well, as his name is not the most popular amongst shareholders. Deutsche Bank is looking for a large splash or outright reboot to reverse its fortunes and chart a new course in 2018 and beyond. As Germany’s largest lender, the bank has had lingering struggles to remain afloat since 2008 with the institution holding massive exposure to derivative securities.
The risk related to the company’s exposure has investors worried about for over eight years. After peaking out in April 2010, the company’s shares tanked to below the crisis lows of 2008. All parties concerned are hoping for some sort of recovery plan to finally come to fruition, led by Sewing.
“Despite his relatively short tenure as CEO, John Cryan has played a critical role in the almost 150 year history of Deutsche Bank – and laid the groundwork for a successful future of the bank. The Supervisory Board in general and I personally are grateful for this. However, following a comprehensive analysis we came to the conclusion that we need a new execution dynamic in the leadership of our bank,” reiterated Achleitner.