Deutsche Bank Management Shakeup Has Jain, Fitschen Stamp
Anshu Jain and Juergen Fitschen, who take over as co-chief executive officers of Deutsche Bank AG (DBK) at the end of May, reorganized the company’s management as they began to put their mark on Germany’s largest bank.
Stephan Leithner, 45, Stuart Lewis, 46, and Henry Ritchotte, 48, will join the management board on June 1, the Frankfurt-based bank said today in a statement. Chief Risk Officer Hugo Banziger, 56, and Chief Operating Officer Hermann- Josef Lamberti, 56, will leave the company on May 31, Deutsche Bank said.
Jain, 49, the investment-banking chief, and Fitschen, 63, who runs Germany, are promoting bankers they worked closely with as they balance the firm’s role as a global investment bank and a lender with long-standing ties to German companies. They take over after a decade in which CEO Josef Ackermann built up the investment- and consumer-banking businesses and steered the company through the financial and sovereign debt crises.
“The new heads can be more effective in implementing new ideas if they appoint executives they’re close to,” said Dieter Hein, an analyst at Fairesearch GmbH near Frankfurt who has a buy rating on the company. “The speed of management changes is positive because it means Deutsche Bank’s new CEOs can smoothly take over operations.”
Deutsche Bank (DBK) rose 25 cents, or 0.7 percent, to 38.67 euros in Frankfurt trading. The stock has gained 31 percent this year, valuing the company at about 36 billion euros ($47.4 billion).
Banziger, consumer-banking head Rainer Neske, 47, and Chief Financial Officer Stefan Krause, 49, were also among candidates for the top job at Deutsche Bank, people with knowledge of the deliberations said in July.
Deutsche Bank proposed Lewis as its risk chief after German financial regulator BaFin opposed the planned appointment of William Broeksmit, the head of risk portfolio optimization at the corporate and investment bank, a person close to the supervisory board said yesterday.
BaFin and Deutsche Bank discussed multiple candidates, and Lewis was selected based on the regulator’s criteria, the person said. Broeksmit didn’t receive unanimous support from BaFin because of concern that he lacked experience managing a large number of employees, the person said.
German Finance Minister Wolfgang Schaeuble defended BaFin today when asked if the authority had intervened in Deutsche Bank’s personnel decisions.
“The regulator doesn’t massively interfere in the personnel plans of financial institutions -- it carries out its legal obligation,” he told reporters in Berlin. “There isn’t the slightest doubt over BaFin’s competence and seriousness.”
Banziger’s responsibilities will be split between management board members, according to Deutsche Bank.
Lewis, currently deputy chief risk officer and head of risk for the corporate and investment bank, will be in charge of market, credit and operational risk. Leithner, co-head of investment-banking coverage and advisory, will lead legal and compliance in addition to global human resources and regional management in Europe, excluding Germany, the statement reads. Banziger’s supervision of treasury will be passed to Krause, the person familiar with the matter said last week.
“It’s clear that since 2007, the job of risk officer has become more important and Banziger did a great job at steering the bank away from risks, which really paid off,” said Manfred Jaisfeld, an analyst with National-Bank AG (2000Q) in Essen, who recommends investors buy Deutsche Bank shares. “The fact that they split the job illustrates that.”
Jaisfeld cited the bank’s “relatively low” risks related to U.S. subprime mortgages compared with some European peers and a “manageable” portfolio of southern European sovereign debt as examples of successful risk management.
Ritchotte, currently COO for the global markets division, will oversee technology, operations and strategy on the management committee, Deutsche Bank said.
The company will also expand its group executive committee to 18 members from 12 effective June 1, Deutsche Bank said in a separate e-mailed statement today. The committee is the second- highest ranking body after the management board and helps coordinate the businesses and regions.
Colin Fan, the head of credit trading and emerging markets, and Rob Rankin, who leads the Asia-Pacific region, will head the investment-banking unit, according to the statement. Fan will join Rankin on the group executive committee.
Gunit Chadha, CEO for India, and Alan Cloete, head of global finance and foreign exchange, will replace Rankin, 48, in the Asia Pacific region and join the GEC. Chadha, 50, will be based in Singapore, while Cloete, 49, will move to Hong Kong from London.
Other executives joining the committee are David Folkerts- Landau, head of research, Colin Grassie, CEO for the U.K., Christian Ricken, COO of private and business clients and Richard Walker, general counsel, according to the statement. The bank said it will announce a successor to Americas CEO Seth Waugh. Like Waugh, his replacement will be a GEC member.
Michele Faissola, who oversees rates and commodities, will head a combined asset and wealth-management operation, according to the statement. Asset management head Kevin Parker and Pierre De Weck, who leads private wealth management, will stand down as GEC members on May 31, Deutsche Bank said.
The division Faissola would oversee combines asset and wealth management and similar businesses that are now part of the investment bank such as exchange-traded funds, said the person familiar with the matter.
Deutsche Bank said last month that it’s holding exclusive talks to sell part of its asset-management divisions to U.S. money manager Guggenheim Partners LLC.
Ackermann, 64, said on a conference call last month that the fact that Deutsche Bank didn’t take a taxpayer-funded bailout to survive the financial crisis following the collapse of Lehman Brothers Holdings Inc. (LEHMQ) has benefited its image among clients. As chairman of the Institute of International Finance, he helped broker a deal on creditors taking losses on Greek debt as part of a bailout of the country.
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