Deutsche Bank, Germany’s biggest lender, has ousted its British chief executive, John Cryan, after years of losses and promoted the co-head of its retail banking arm to the top job.
Following a two-week boardroom battle, Deutsche has appointed Christian Sewing as chief executive with immediate effect. He vowed to take “tough decisions” to return the bank to profitability.
Cryan, a Yorkshireman who took the helm at Deutsche in June 2015, leaves at the end of this month, two years before his contract was due to end.
Deutsche has had three years of losses, and its net loss widened in the fourth quarter. Cryan has been criticised for being too slow in pushing through cost-cutting measures at the bank, which employs 100,000 people worldwide.
As part of the boardroom shake-up, Garth Ritchie will become sole head of the corporate and investment bank. He had shared the role with Marcus Schenck, who told the supervisory board before Easter that he would leave the bank after the annual meeting on 24 May. Ritchie and the executive board member Karl von Rohr were both appointed deputy CEOs.
Sewing, 47, started working for Deutsche as an apprentice in 1989 and has held roles including head of group audit and management positions in risk.
He told staff in a letter published on the bank’s website that he would thoroughly analyse how Deutsche wants to position its investment bank in a difficult market environment.
“The priority is to leverage our strengths and to allocate our investments accordingly. And at the same time we will look to free up capacity for growth by pulling back from those areas where we are not sufficiently profitable,” he said.
Octavio Marenzi, who runs capital markets management consultancy Opimas, said there could be job losses in London as a result.
“We can expect a much stronger emphasis on the domestic German market, with a focus on commercial and retail banking, and wealth management. It looks like the board of directors is capitulating on the investment banking front. This will hit Deutsche Bank’s London presence particularly hard, where the bulk of its investment banking activity is based. We expect to see those activities right-sized or sold off, with attendant headcount reductions.”
Deutsche’s chairman, Paul Achleitner, thanked Cryan for the “critical role” he played in his relatively short tenure as CEO. “However, following a comprehensive analysis we came to the conclusion that we need a new execution dynamic in the leadership of our bank.”
Cryan took a €400,000 pay cut last year and was paid €3.4m. He and the rest of the 13-strong management board waived their bonuses for 2017, but their collective pay still rose to €29.2m from €25.9m in 2016.