Deutsche Bank AG, Germany’s biggest bank, named Anshu Jain the sole head of its corporate and investment bank, the company’s biggest money maker.
Jain, 47, will assume responsibilities for the corporate finance and transaction banking units from Michael Cohrs, 53, who plans to retire, the Frankfurt-based bank said yesterday. Jain will take over Cohrs’s duties on July 1.
Jain helped build Deutsche Bank into a bond-market powerhouse since becoming co-head of the investment bank in 2004. His expanded role may position him to succeed Chief Executive Officer Josef Ackermann, whose contract runs until 2013, analysts said. The corporate and investment bank generated more than 90 percent of group profit in the first quarter, buoyed by Jain’s sales and trading division.
“The investment bank has been the success and profit driver and Jain deserves the credit,” said Lutz Roehmeyer, who helps manage about $15 billion at Landesbank Berlin Investment, including Deutsche Bank shares. “He’s definitely a favorite to succeed Ackermann at the moment.”
Ackermann, 62, agreed in April 2009 to extend his tenure until 2013 after the supervisory board failed to choose a successor. The Swiss-born CEO said last week he plans to fulfill his contract because he wants to help reshape the financial regulatory system.
Jain led a turnaround at the investment bank in 2009, a year after the worst financial crisis since the Great Depression pummeled stock and bond trading and led to Deutsche Bank’s first annual loss in more than 50 years. He cut assets by about 50 percent at the global markets unit and shut credit proprietary trading to curb risk amid the financial crisis.
Deutsche Bank, which sidestepped the worst of the credit crunch and eschewed a government bailout, advanced 11 percent in the past year in Frankfurt trading. The Bloomberg Europe Banks and Financial Services Index, which tracks 52 companies, gained 8.9 percent during the period.
“Anshu Jain is taking over a strong business division,” Ackermann said in the statement. “We are confident that he will build on this success.”
Deutsche Bank’s supervisory board approved Cohr’s request to retire at the end of September. He will join the bank’s European advisory board on Oct. 1, the company said.
Jain plans to spend about 1.6 billion euros on hiring and technology for the global markets unit in the next two years to break into the top five in commodities and U.S. cash equities. While the fixed-income division accounts for about 80 percent of sales and trading revenue, Jain also reorganized the equities unit and posted the best result since 2007 in the first quarter.
Deutsche Bank aims to double pretax profit at the operating businesses by 2011 to 10 billion euros from 2009, helped by gains in investment banking and Asia. The investment bank is forecast to earn 6.3 billion euros in profit next year.
Challenges for the financial industry include risks related to sovereign deficits, tighter regulation and product liability, Jain said in May.
Governments have pushed for more oversight of derivatives, curbs on riskier activities such as proprietary trading and higher capital requirements to avoid a repeat of the credit crisis. New rules may cut Deutsche Bank’s net income by 13 percent, Citigroup Inc. analyst Kinner Lakhani wrote in a report in April.
Jain, born in Jaipur in India’s Rajasthan state, joined Deutsche Bank in 1995 from Merrill Lynch & Co., following his mentor Edson Mitchell to the German bank. After the 47-year-old Mitchell died in a plane crash before Christmas in 2000, Jain took over as head of debt. He was picked to run the combined debt and equity sales and trading unit in 2004.
Cohrs Steps Down
Jain and Cohrs joined Deutsche Bank’s management board in April 2009, along with Rainer Neske, 45, the head of private and business clients, and regional management chief Juergen Fitschen, 61.
Jain, who is based in London, has helped Deutsche Bank become one of the largest players in the debt market, ranking second globally this year in international bonds and first in Europe, data compiled by Bloomberg show.
Cohrs, who has run corporate and investment banking with Jain since 2004, is retiring after 15 years at the bank, people familiar with his plans said earlier this month. He is leaving after helping the German lender move into the top five in mergers and acquisitions globally this year.
Cohrs, an American who has an MBA from Harvard University, appointed Stephan Leithner, 44, and Jacques Brand, 49, as co-heads of global coverage in October to oversee the firm’s investment bankers. He made M&A co-head Brett Olsher, 49, chairman of the global clients executive committee, in charge of leading relationships and transactions with clients.
Jain studied economics at Sri Ram College of Commerce at Delhi University, earning a bachelor’s degree with honors. He didn’t travel farther than Afghanistan until he was 20, when he followed his wife, Geetika, and her family to the U.S.
Jain enrolled in business school at the University of Massachusetts at Amherst, where he learned about derivatives -- financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in the weather or interest rates.
After graduating in 1985, he joined Kidder Peabody & Co., which was acquired the following year by General Electric Co. and is now part of Zurich-based UBS AG, as a research analyst. Three years later, he moved to Merrill as a derivatives strategist and then a salesman.