March 29, 2024

DealBook: Deutsche Bank Names Co-C.E.O.’s to Succeed Ackermann

Deutsche Bank named Anshu Jain, left, and Juergen Fitschen as co-chiefs.ReutersDeutsche Bank named Anshu Jain, left, and Jürgen Fitschen as co-chief executives.

7:45 p.m. | Updated

FRANKFURT — Deutsche Bank on Monday resolved a leadership crisis, saying that Anshu Jain, head of its investment bank, and Jürgen Fitschen, head of the German unit, will share chief executive duties at the country’s largest bank starting next year.

Josef Ackermann, 63, who has been chief executive since 2002, will become chairman of the supervisory board if shareholders approve, Deutsche Bank said in a statement.

Clemens Börsig, current chairman of the board, will step down from the part-time position.

The changes will take effect after the bank’s annual shareholder meeting in May.

The decision announced on Monday ended an internal dispute that had dismayed investors and made the bank’s boardroom intrigues into almost daily fodder for the German media.

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Investors had favored Mr. Jain, whose unit supplies by far the greatest share of profits, as chief executive. But Mr. Jain, a native of India who is not fluent in German, was regarded as not ready to assume the statesmanlike duties expected of the head of an institution that holds a prominent place in the nation’s identity.

The risk is that the new dual-leadership structure may prove to be unwieldy and could lead to tension between Mr. Ackermann and Mr. Jain, whose relationship is regarded as cool.

“I fully endorse the decisions taken by the supervisory board today,” Mr. Ackermann said in a statement.

Mr. Ackermann had already postponed his planned retirement because of problems finding a successor. Tension between Mr. Ackermann and Mr. Börsig had broken into the open as they quarreled about the best solution.

Mr. Fitschen, 62, is expected to help overcome reservations by Deutsche Bank staff members about Mr. Jain, 48. German employee representatives make up half the 20 members of the supervisory board and thus have a strong say in the decision.

Mr. Jain will receive a contract until 2017, while Mr. Fitschen’s contract will run until 2015, Deutsche Bank said. That suggests Mr. Fitschen is likely to serve as a transitional figure while Mr. Jain learns more about Deutsche Bank’s other businesses, at which point he could become sole chief executive.

Mr. Ackermann’s role as a public figure was underlined last week when he was a crucial person in negotiating a Greek debt relief deal with European leaders. The deal for a bond swap will cut the value of banks’ holdings of Greek bonds, but analysts regard it as favorable for creditors in the long run.

As supervisory board chairman, Mr. Ackermann will be able to continue to serve banking interests as someone who has the ear and respect of people like Angela Merkel, chancellor of Germany.

Mr. Ackermann is also chairman of the Institute of International Finance, whose members include most large international banks. The institute represented banks and insurance companies in negotiations that led to the Greece rescue package.

Mr. Ackermann had previously said that he did not want to become supervisory board chairman, but appeared to change his mind in recent weeks as the succession debate became more intractable.

The plan may draw criticism from corporate governance advocates, who argue that chief executives may not be able to make necessary changes if watched over by their predecessors. German law discourages chief executives from becoming chairmen, requiring approval by 25 percent of shareholders for such a change.

Mr. Jain came to Deutsche Bank in 1995 as one of scores of investment bankers who followed Edson Mitchell from Merrill Lynch, vastly expanding the bank’s revenue from activities like trading and deal-making. After Mr. Mitchell died in a plane crash in 2000, Mr. Jain succeeded him.

With penetrating eyes and an air of serene confidence, Mr. Jain looks the part of global investment banker, one who has played a crucial role in lifting Deutsche Bank into the top ranks of global finance, able to hold its own against the likes of Goldman Sachs and JPMorgan Chase.

Mr. Jain, who has been based in London along with most investment banking operations, sometimes seemed slightly out of place in Frankfurt, wearing an earphone at the annual meeting to hear a translation of the proceedings. But investors feared that he might leave the bank if he did not get the top job.

Mr. Fitschen is less well known outside the bank. His title is head of regional management worldwide as well as chief executive in Germany, jobs that are more supervisory than operational. But Mr. Fitschen is well connected in Germany, sitting on the boards of several large companies, including Metro, the country’s largest retailer.

Deutsche Bank’s corporate and investment bank group, led by Mr. Jain, reported pretax profit in the first quarter of 2.56 billion euros ($3.7 billion), compared with 978 million euros in pretax profit from private clients and asset management, the bank’s other main unit. (The bank is scheduled to report second-quarter results on Tuesday.)

Deutsche Bank survived the financial crisis without a direct government bailout, but was forced to take billions of euros in write-downs and since then has been trying to expand less risky businesses like retail banking.

While many Germans still see Deutsche Bank as a symbol of the nation’s financial strength, the bank’s future probably lies abroad. With its aging, shrinking population, Germany does not offer the same growth potential as new markets like Asia — where Mr. Jain’s lack of German fluency will not be an issue.

Article source: http://feeds.nytimes.com/click.phdo?i=d6060bf1a3800fd30e8dd5e4c7ff0658