NEW YORK (The Deal) -- Deutsche Bank (DB) on Sunday, June 8, announced the resignation of its co-CEOs, delighting investors worried the duo did too little to end a series of scandals and lacked the power to usher in a new era at Germany's biggest bank.
Anshu Jain will resign from Frankfurt-based Deutsche on June 30, while partner CEO Jürgen Fitschen will remain atop the bank until after next year's May 19 shareholders' meeting. Fitschen will govern alongside his eventual replacement, John Cryan, who will become co-CEO on July 1 and then rule alone after Fitschen steps down next year.
Cryan, 54, has been a member of Deutsche's supervisory board since 2013. He leads the audit committee and is a member of the risk committee. He was European president of Singporean sovereign wealth fund Temasek Holdings from 2012 to 2014 and CFO at Swiss UBS (UBS) from 2008 to 2011.
Jain and Fitschen in April announced a new strategic direction, known as 2020, to increase profits and end a series of scandals that cost the bank €7.1 billion ($7.9 billion) over the past three years in fines and settlements. The pair promised to sell or list Deutsche's Postbank retail division, shutter 200 branches and reduce investment banking activities but stopped short of ending the institution's role as a "universal" bank, as some had hoped.
"The market can finally price in at least part of the new 2020 strategy since there had been little faith in the management duo," wrote UBS analyst Daniele Brupbacher in a note. Brupbacher has a neutral rating on the stock.
Many investors and analysts felt the executives weren't going far enough, a sentiment the co-CEOs even acknowledged while announcing their plans. The bank was singled out by U.K. authorities investigating the Libor rate-fixing scandal as doing little to rein in errant bankers.
Their replacement, a U.K. national, is an experienced European banker who analysts said is a confidant of Deutsche Bank supervisory board chairman Paul Achleitner. The staggered exit of the CEOs indicates that Achleitner and his board, which must approve all major strategic steps at Deutsche, were most unhappy with Jain.
To be fair, Jain was seen as the more active and involved of the two-headed leadership, with Fitschen playing a more advisory role.
"Their decision to step down early demonstrates impressively their attitude of putting the bank's interests ahead of their own. We are grateful to Jürgen for having agreed to continue to serve in his role until the conclusion of the Annual General Meeting on May 19, 2016, to help ensure a smooth transition," Achleitner said in a statement.