Deutsche Bank Seeking Replacement for CEO, London Times SaysBy and
Cryan and Chairman Achleitner disagree on strategy, paper says
CEO reportedly sought further restructuring of investment bank
Deutsche Bank AG is considering candidates to potentially replace Chief Executive Officer John Cryan amid heightened tensions between him and Supervisory Board Chairman Paul Achleitner, the Times of London reported without saying where it got the information.
The bank approached Richard Gnodde, the head of Goldman Sachs Group Inc.’s international operations, but he’s thought to have spurned the overture, the newspaper said. Deutsche Bank also considered UniCredit SpA CEO Jean Pierre Mustier and Standard Chartered Plc CEO Bill Winters, according to the report.
“Cryan may be a good person, but he’s not the right guy on top of Deutsche Bank,” Stefan Mueller, CEO of the German Institute for Asset and Equity Allocation and Valuation, said in an interview with Bloomberg TV. Still, “I think the main problem at Deutsche Bank is Paul Achleitner, he implemented all these CEOs in the last years.”
Disagreement between Cryan, 57, and Achleitner, 61, has flared over strategy, with the CEO and Chief Financial Officer James von Moltke pushing for a more radical restructuring of businesses including the investment bank, the newspaper cited a senior source as saying. Cryan also irked Achleitner last year by avoiding a meeting with one of the company’s top shareholders, HNA Group Co., the Wall Street Journal reported in October. The Chinese government has since pushed the indebted conglomerate to unwind an acquisition binge.
Deutsche Bank spokeswoman Monika Schaller declined to comment on the Times’s report. The newspaper said Goldman Sachs also declined to comment.
Deutsche Bank shares rose as much as 3.5 percent in Frankfurt trading to 11.58 euros before paring gains to trade 0.8 percent higher at 11.27 euros as of 10:17 a.m. local time.
Last March, Cryan laid out the Frankfurt-based firm’s third strategy revamp in as many years, pledging to return to “controlled growth.” A sustained slide at the investment bank has since contributed to hundreds of job cuts to curb costs and improve returns. Trading at the unit, headed by Marcus Schenck and Garth Ritchie, slumped 27 percent in the fourth quarter, while fees from advising on deals and arranging debt and equity sales slipped 3 percent.
Von Moltke spotlighted current challenges at the division at an investor conference last week. That included the euro’s gain against the dollar, which may reduce the unit’s revenue by about 300 million euros ($368 million) this quarter from a year earlier, he said.
Schenck is also viewed internally as a strong candidate, the Times cited one former executive as saying. At an event hosted by Bloomberg in London last week, Schenck said the lender still has some work to do to convince shareholders that its turnaround is on track.
“John has always made it very clear -- look, this is not a one-quarter journey. This is a several-year journey,” Schenck said of Cryan. “We think we’re on the right path with that journey. But we definitely are a show-me case.”
Three of the 10 largest stakeholders in the bank, speaking on condition of anonymity late last year, said they wanted to see a turnaround in the next few quarters, particularly in the trading business, to continue to back Cryan. Two said that, should he not be able to deliver by the annual shareholder meeting in May, an external candidate may be the best option to replace him.
Not everyone, though, views a change at the top of the lender as desirable given that the bank is still in restructuring mode.
“I think he’s done a tremendous job in very trying circumstances and a CEO change now would just delay the implementation of the strategy,” Neil Smith, an analyst at Bankhaus Lampe who recommends investors buy Deutsche Bank shares, said by phone from Dusseldorf on Tuesday. “You can’t expect results immediately. Deutsche Bank is in a turnaround situation.”
— With assistance by Nicholas Comfort