Anshu Jain: Deutsche Bank's Next CEO?

The appointment of Anshu Jain as sole head of Deutsche Bank's (DB) investment bank last month put him in charge of more than 80 percent of the company's profit and reinforced his position as a front-runner to become chief executive. One catch: He was born in India and doesn't speak German, a potential handicap for an executive who must negotiate the corridors of political power as well as global markets. "Based on performance, Jain is the crown prince," says Lutz Roehmeyer, who helps manage about $15 billion at Landesbank Berlin Investment in the German capital. "But Deutsche Bank has a split personality—a global investment bank being run out of London and a German lender with a very political role. Any successor's key challenge will be bridging these two worlds."

Deutsche Bank's board ducked the issue last year by extending CEO Josef Ackermann's tenure for three years after failing to agree on a replacement. The Swiss-born Ackermann, 62, revived speculation about succession in May when he told shareholders that he's been holding "intensive" talks on the topic with supervisory board Chairman Clemens Boersig for months. Jain, Ackermann, and Boersig declined to comment for this article.

Jain, 47, born in Jaipur in Rajasthan state and educated in India and the U.S., joined Deutsche Bank 15 years ago from Merrill Lynch (MER). He took over the debt sales and trading division in 2001 and in 2004 was named co-head of the investment bank, with Michael Cohrs, who is retiring this year. Jain helped build Deutsche Bank into a fixed-income powerhouse, more than doubling debt sales and trading revenue between 2000 and 2009. The investment banking division generated 78 percent of the bank's pretax earnings in the first half of this year.

Jain, who lives in West London with his wife and two children, studied economics at Shri Ram College of Commerce at the University of Delhi, earning a bachelor's degree with honors. When he was 20, he followed his now-wife to the U.S., where her family was moving. He enrolled in business school at the University of Massachusetts at Amherst. After earning a master's of finance degree in 1985, he started out as an analyst at Kidder Peabody before moving to Merrill Lynch three years later.

These days Jain, trim and graying, projects the poise and confidence of a seasoned investment banker. His speech, direct and precise, still carries a faint Indian accent. A cricket player and golfer, he's competitive in both work and sport, colleagues say, and relishes opportunities to prove his doubters wrong. He held a stake in the Mumbai Indians, a cricket team, until selling it last year.

The evolution of Deutsche Bank into a global institution runs parallel with Jain's career at the company. Since 1995, the year he joined, the proportion of revenue it derives from Germany has dwindled to 25 percent from almost 70 percent, company reports and presentations show. The slice of income the bank generates from trading quadrupled to 44 percent during the same span.

Now Deutsche Bank, with two-thirds of its workforce based outside the country, promotes itself as an international firm: The word "global" appears more than 200 times in its 2009 annual report. On its website the company refers to a "meritocratic tradition and culture." About 54 percent of Deutsche Bank's shareholders are based outside Germany.

Yet it isn't just another global brand. "The special thing about Deutsche Bank is that it carries the name of the country," Ackermann said in a recent television documentary about him. "We're in a sense the representative of Germany around the world." Some investors say that role may lessen Jain's chances to lead the bank. "In many ways, you're not just a banker but also an adviser to the government and industry," says Ulrich Hocker, president of Germany's DSW private shareholders association in Düsseldorf. "I mean, it is called 'Deutsche' Bank, after all. It's impossible to be the Deutsche Bank CEO without speaking German. I'd recommend a crash course."

Jain's main rivals for the job are Chief Risk Officer Hugo Banziger, 54, a Swiss native who helped steer Deutsche Bank through the credit crisis without state aid, and Chief Financial Officer Stefan Krause, 47, who joined from Munich-based carmaker BMW in 2008, say two people familiar with the matter who declined to be identified. Banziger and Krause wouldn't comment.

Nine of the country's 30 biggest public companies are led by non-Germans, including two—SAP and Fresenius Medical Care—that have CEOs who speak little German. Deutsche Bank's management board holds its meetings in English, the company's official language since the $9 billion takeover of New York-based Bankers Trust in 1999.

Jain's role running the entire corporate and investment bank, in which he will oversee advisory services and lending to Germany's largest companies, as well as transaction banking, will put him closer to German customers and the politics surrounding Deutsche Bank.

Not offering Jain the top job risks driving out the "best candidate" and disappointing analysts and investors, says Peter Thorne, a London-based analyst at Swiss broker Helvea: "If the German powers that be can't see he's the best man for the job, that would be a sad day for Deutsche Bank and the German finance industry as a whole."

The bottom line: Deutsche Bank increasingly pitches itself as a global financial institution, but it may not be ready to appoint a non-German-speaking CEO.

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