According to the latest news report by Bloomberg, Deutsche Bank AG’s Chairman Paul Achleitner is under tremendous pressure to decide on the future of the bank’s CEO John Cryan and close the matter in the next few days.
An update call has been scheduled on Sunday evening with supervisory board members, according to inside sources that do not wish to be identified as this matter has still not been made public.
In the last few weeks, Achleitner has been speaking with possible candidates for the role of CEO, however, hasn’t given any decision on the matter despite weeks of speculation. According to the aforementioned sources, with frustration in the bank and among shareholders growing, Achleitner’s options to fill this leadership role are narrowing fast.
According to the insider, the Chairman has to make a decision to either back Cryan or announce a succession plan by the middle of next week. Currently, the banks Chief Financial Officer James von Molke, Marcus Schenck and Christian Sewing – the company’s deputy CEOs, are the leading contenders for the position. However, it is still entirely possible that the Chairman may end up picking a surprise outsider.
The reason for this current situation is a difference of opinions between the Chairman and the CEO. The factor causing this split is the question about how the US investment banking operations should be handled. According to the CEO, John Cryan, after having reviewed the banks activities in the US, operations in America need to be scaled back. However, Achleitner believes that the US operations are critical to the global investment banking model. And this difference in opinion has led to this very public battle between Chairman and CEO.
CEO of Algebris Investments, David Serra, a public fight between the CEO and the Chairman of a company is just the wrong way to manage the organization.
The challenge that Deutsche Bank is facing is that the Chairman and its banks investors have been looking far and wide for a successor to John Cryan, and, so far, they have had no success.
According to the grapevine, UniCredit SpA’s CEO Jean Pierre Mustier as well as the CEO of Standard Chartered Plc Bill Winters have been approached. Additionally, one of the top investors in the bank as well as professional recruiters have also reached out to Matt Zames, the ex-executive of JP Morgan Chase & Co., as well as to Christian Meissner from Bank of America Corp. Unfortunately, according to inside information, none of these people have shown interest in this post.
Added to the fact is the previous interviews conducted by Achleitner have yielded no offers being made to any of the candidates.
This fight has pulled the already struggling share price of the bank down even further. The bank’s shares fell another 2.6% in Germany, which takes the total drop for the year to 28%.
Cryan has repeatedly affirmed his commitment to his role. However, Achleitner has refused to back his own CEO since the search for his replacement began a few months ago.
Sadly, despite having reduced risk, raising fresh capital for the bank and also settling legacy misconduct cases, Cryan has not be successful in being able to turn around revenue growth in the company. However, Achleitner is also now being criticized for not being able to steer towards a recovery – even after having gone through 3 different CEOs in the last six years.
The challenges that face Deutsche Bank are such that there aren’t many takers for the top spot in the company.