John Bacon and Mike Snider, USA TODAY 1:43 p.m. EDT June 7, 2015
(Photo: Boris Roessler, EPA)
The co-chief executives of embattled German banking giant Deutsche Bank (DB), Anshu Jain and Jürgen Fitschen, are stepping down, the bank announced Sunday.
Germany’s largest bank issued a statement saying its supervisory board “decided at an extraordinary meeting today” to appoint John Cryan, 54, to the position of co-chief executive officer, effective July 1.
The move follows Deutsche Bank’s agreement less than two months ago to pay $2.5 billion to settle charges brought by U.S. and British authorities that it manipulated benchmark interest rates between 2005 and 2009.
Cryan has been on the bank’s supervisory board since 2013 and previously has served as chairman of the audit committee and was a member of the risk committee. He will step down from the supervisory board when he becomes co-CEO.
“He knows the bank well, and we are convinced that he is the right person at the right time,” said Deutsche Bank supervisory board chairman Paul Achleitner in the bank’s statement.
John Cryan will succeed Jain in July 2015 and will become the sole CEO in May 2016. (Photo: Steffen Schimidt, AP)
Cryan was president for Europe at Singaporean investment company Temasek from 2012 to 2014. Before that, Cryan was chief financial officer of UBS from 2008 to 2011.
His appointment followed the decision of Fitschen and Jain to “step down early from their roles,” the bank said. Jain will stay until June 30, and the board asked him to remain as a consultant through year’s end. The board “asked Mr. Fitschen to remain in his current role until the conclusion of the annual general meeting on May 19, 2016, to help ensure a smooth transition.”
Both CEOs’ contracts were due to run through March 31, 2017.
Deutsche Bank to pay $2.5B for Libor rate violations
Two weeks ago, Deutsche Bank agreed to a $55 million settlement with the U.S. Securities and Exchange Commission over misstated paper losses of at least $1.5 billion during the global financial crisis.
That agreement came after the settlement charges in April, which included payments of $600 million to the New York State Department of Financial Services, $800 million to the Commodities Futures Trading Commission, $775 million to the U.S. Department of Justice, and $340 million to the United Kingdom’s Financial Conduct Authority.
Deutsche Bank agrees to $55M SEC penalty
Also in April, Deutsche Bank announced a reorganization that involved spinning off its Postbank branches in Germany, closing offices in some countries and eliminating less profitable business at its investment banking division.
The bank’s leadership drew shareholder anger at its annual meeting last month amid concerns over disappointing profit growth, the fines and the restructuring plans. Hermes Equity Ownership Services, a major stakeholder, had called for management changes.
Achleitner said the current CEOs’ agreement to step down “demonstrates impressively their attitude of putting the bank’s interests ahead of their own.”
He lauded Cryan, saying he is “not only a seasoned banker with extensive experience in financial matters but also espouses the professional and personal values required to advance Deutsche Bank.”
Deutsche Bank “is a special institution,” Cryan said in the bank’s statement. “Our future will be defined by how well we deliver on strategy, impress clients and reduce complexity.”