Deutsche Bank ousts British CEO after two-week boardroom battle

John Cryan replaced by Christian Sewing, vowing ‘tough decisions’ to reverse years of losses

Deutsche Bank has ousted its British chief executive, John Cryan, after years of losses and promoted the retail banking arm co-head to the top job.

Following a two-week boardroom battle, Deutsche appointed Christian Sewing as chief executive on Monday with immediate effect. He vowed to take “tough decisions” to return the bank to profitability.

Cryan, a Yorkshireman who took the helm in June 2015, will leave at the end of this month, two years before his contract was due to end.

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Deutsche has had three years of losses, and its net loss widened in the fourth quarter. Cryan has been criticised for being too slow in pushing through cost-cutting measures at the bank, which employs 100,000 people worldwide.

As part of the boardroom shake-up, Garth Ritchie will become sole head of the corporate and investment bank. He had shared the role with Marcus Schenck, who earlier said he would leave the bank after the annual meeting on 24 May. Ritchie and Karl von Rohr, an executive board member, were appointed deputy CEOs.

Sewing, 47, started working for Deutsche as an apprentice in 1989 and has held roles including head of group audit and management positions in risk.

He told staff in a letter published on the bank’s website that he would thoroughly analyse how Deutsche wants to position its investment bank in a difficult market environment.

“The priority is to leverage our strengths and to allocate our investments accordingly. And at the same time, we will look to free up capacity for growth by pulling back from those areas where we are not sufficiently profitable,” he said.

Octavio Marenzi of the consultancy Opimas said there could be job losses in London as a result.

“We can expect a much stronger emphasis on the domestic German market, with a focus on commercial and retail banking, and wealth management. It looks like the board of directors is capitulating on the investment banking front,” he said.

“This will hit Deutsche Bank’s London presence particularly hard, where the bulk of its investment banking activity is based. We expect to see those activities right-sized or sold off, with attendant headcount reductions.”

Deutsche’s chairman, Paul Achleitner, thanked Cryan for the “critical role” he played in his relatively short tenure as CEO, but said “we came to the conclusion that we need a new execution dynamic in the leadership of our bank”.

Cryan took a €400,000 (£348,000) pay cut last year and was paid €3.4m. He and the rest of the 13-member management board waived their bonuses for 2017, but their collective pay still rose from €25.9m in 2016 to €29.2m.

The UBS analysts Daniele Brupbacher and Mate Nemes said Sewing’s appointment sent out signals of stability and continuity, and underlined the importance of the German business.

“Christian Sewing’s first statements do not indicate major strategic shifts, but a continued focus on costs and getting the structures right, particularly in investment banking, where we would expect further adjustments to the footprint. Also, a focus on rigorous and faster execution could be the result,” they said.

They said the investment banking strategy remained the key strategic question mark and achilles heel of Deutsche.

Contributor

Julia Kollewe

The GuardianTramp

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