The fortunes of co-CEOs rise and fall together: it’s hard not to stumble when you’re joined at the hip. So it’s not surprising both Jürgen Fitschen and Anshu Jain have quit the top role at Deutsche Bank, after enormous fines and increasing questions over its strategy.
Jain was the first to offer up his head on a platter, according to the Wall Street Journal, and will step down at the end of the month (although he is staying on as a ‘consultant’ until January 2016). Fitschen, on the other hand, will stay in the job until the bank’s next AGM in May 2016, when he will be replaced by board member and former UBS CFO John Cryan.
The German giant’s shares rose as much as 8% this morning to more than €29. Since the pair took over in 2012, they’ve risen just 1.9%.
It’s been a troubled few years at Deutsche Bank. It had to go cap in hand to shareholders in 2013 and 2014. Then in April it paid a record $2.5bn (£1.6bn) fine for rigging the Libor interbank-lending rate, having settled a long-running legal wrangle with the heirs of the late media tycoon Leo Kirch for $925m lasty year.
Things came to a head at its AGM two weeks ago when a long-awaited new strategy failed to fulfill the hope of many shareholders that the increasingly unwieldy global organisation would be broken up. That disappointment led to 39% voting against the co-CEOs’ performance in the last year, a symbolic vote but quite possibly the last straw for Jain.
The Indian-born British citizen had apparently failed to learn fluent German and so struggled to engage investors, according to the Wall Street Journal, which also claimed criticism from German unions and media over jobs cuts and branch closures had driven his decision to quit.
That may well be the case, but it’s quite likely any media digs and language difficulties would have been water off Jain’s back had the bank’s performance been better. Moreover, chairman Paul Achleithner had apparently already started looking for a successor to the pair a year ago, hence the speed of fluent German speaker Cryan’s appointment. His statement that, ‘Their decision to step down early demonstrates impressively their attitude of putting the bank’s interests ahead of their own,’ says it all really.
Cryan, who headed up Singaporean government investment company Temasek in Europe from 2012 to 2014, has a job ahead of him, not least because he approved his predecessors’ strategy as a member of Deutsche Bank’s board. But the Brit, who analysts have variously described as ‘cautious’ and ‘underpromising to overdeliver’, has got the thumbs up from investors, so that’s one less thing to worry about.