Deutsche Bank UK-born boss John Cryan sacked after years of losses – BBC News


John CryanImage copyright
Getty Images

Image caption

On his way out… but Deutsche Bank said John Cryan had “laid the groundwork for a successful future of the bank”

Deutsche Bank has dismissed its chief executive John Cryan amid continued losses at Germany’s biggest lender.

Mr Cryan, who was born in Sunderland, began the job in 2015, but since then there has been a series of scandals as well as three years of reported losses.

Co-deputy chief executive Christian Sewing will take over the role with immediate effect.

“We need a new execution dynamic in the leadership of our bank,” Deutsche Bank chairman Paul Achleitner said.

The shake-up was announced after an emergency meeting which ran late into Sunday night.

Mr Cryan’s contract was due to run until 2020.

“Despite his relatively short tenure as chief executive, John Cryan has played a critical role in the almost 150 year history of Deutsche Bank – and laid the groundwork for a successful future of the bank,” Mr Achleitner said.

Mr Sewing, who has been with Deutsche Bank for more than 25 years, was most recently responsible for its private and commercial bank operations.

Some analysts say his appointment suggests a strategic shift towards retail banking in its home market.

Investment slump

Deutsche Bank has faced a sales slowdown and its share price has fallen 30% this year.

And according to Reuters, the search to replace Mr Cryan began after the bank reported an annual loss of €500m (£436m) at the end of February.

That followed losses of €6.8bn in 2015 and €1.4bn in 2016.

Image copyright
Reuters

Mr Cryan was appointed as co-chief executive in July 2015 to overhaul the bank following a number of regulatory problems stretching back to before the financial crisis.

He was also tasked with controlling the bank’s spiralling costs and quickly cut thousands of jobs.

But after becoming sole chief executive in 2016, the lender continued to struggle, largely because of a slump in its investment banking division which accounts for more than half of sales.

In resolving its legal difficulties, it also incurred a series of heavy penalties, including a $7.2bn (£5.9bn) payment to US authorities in 2016 over an investigation into mortgage-backed securities.

At that time, it was considered to be the most dangerous bank in the world after the International Monetary Fund (IMF) found that a potential collapse of Deutsche posed the biggest risk to the stability of the global financial system.

Also in June 2016, Deutsche Bank’s US division failed a stress test conducted by the Federal Reserve, America’s central bank.

Deutsche Bank and Banco Santander’s US unit were the only two of 33 banks to fail the test to see how they would perform in a financial crisis.

‘Fundamental problem’

Markus Riesselmann, an analyst at Independent Research, told the AFP news agency: “[Mr Cryan] had to battle serious problems that his predecessors swept under the rug for years.

“He’s largely cleared those up and now it looks like Deutsche can’t turn things around regarding margins. But I doubt a new chief executive could successfully make that transition.

Image copyright
Getty Images

Image caption

Christian Sewing has been described as strong and disciplined

“It seems rather to be a fundamental ‘Deutsche Bank problem’.”

Commenting on the new chief executive, Mr Achleitner said: “In his more than 25 years at Deutsche Bank, Christian Sewing has proven himself a strong and disciplined leader.

“The supervisory board is convinced that he and his team will be able to successfully lead Deutsche Bank into a new era. We trust in the great ability of this bank and its many talents.”

Deutsche Bank also announced that the co-head of its corporate and investment banking, Marcus Schenck, is leaving.



Source link

Comments are closed

Featured Links

    Search Archive

    Search by Date
    Search by Category
    Search with Google

    Photo Gallery

    Log in | Designed by Gabfire themes