According to the news report by Reuters, a new Chief Executive Officer has been chosen for Deutsche Bank and it is Christian Sewing. The bank made on announcement on Sunday evening that Sewing would be replacing John Cryan with immediate effect.
John Cryan had been CEO for the bank for barely under three years. The British investment banker was made co-CEO of the company in 2015, and took over the position of CEO in 2016. In his time, he had been unable to turn an annual profit. Additionally, the bank lost more than 50% of its market value in that time.
Cryan cuts tens of thousands of jobs and shut down hundreds of branches across the world as cost cutting measures. CNN Money noted that the efforts of the 57 year old CEO weren’t enough to turn the company around. The bank had already been hounded by problems ever since the 2008 financial crisis.
In 2015, when Cryan was co-CEO, the bank posted 6.8 billion Euros in losses ($8.4 billion). Then in 2016, when he took over as CEO, the struggling bank posted another 1.4 billion Euros of losses ($1.7 billion). And finally, in 2017, the bank posted an annual loss of 500 million Euros ($610 million).
When the most recent losses were reported in February this year, Cryan pleaded for more time. He stated that it had always been clear that it would take more than two or three years to turn the fortunes of the company around. However, he wasn’t give than time and was ousted by Christian Sewing this Sunday.
Paul Achleitner, the Chairman of the supervisory board of Deutsche Bank announced that after a “comprehensive” analysis of the situation, the bank had come to the decision that new leadership was required. He thanked Cryan for his work, saying that despite being with the bank only a short time, he had already laid the foundations of a successful future.
The shares of the bank went up by 3% in trading in Frankfurt today.
The new CEO of Deutsche Bank is everything that Cryan is not. First, he’s German. And he’s been with the bank for more than three decades; he started at Deutsche Bank as a teenager and worked his way up the ranks to his last role as the head of the wealth management and retail banking division of the company.
In his first communication to the employees of the company, the new CEO, Christian Sewing focused on the importance of cost cutting targets, warning the management that excuses would no longer be acceptable for missed cost and revenue goals. He also hinted at future changes at the bank, saying he wanted to assess the company’s current position in the market and how they could further adapt their cost, capital and revenue structure to become more competitive.
The future is going to be challenging for the new CEO. And the biggest question that he is going to have to deal with – soon – is what path Deutsche Bank must take in the future to ensure competitiveness.
Cryan may have taken the fall, but according to investors, the Chairman cannot escape responsibility either. Paul Achleitner is also now under fire for his part in the poor performance of the bank. Investors feel that he is as much to blame as Cryan for the bank not turning itself around and he will need to explain himself at the upcoming shareholder meeting in May.
According to Andreas Meyer from Aramea Asset Management, Achleitner has been with Deutsche Bank since 2012 and in that time he has made a lot of bad decisions. The best thing would be that he leave the company now.