Deutsche Bank co-chiefs quit over scandals

The German bank, one of the City’s largest employers with nearly 7,000 employees, said that Anshu Jain and Jürgen Fitschen would step down, to be replaced by John Cryan, a member of the lender’s supervisory board, reports The Times.

The unexpected news came only two weeks after the bank had set out a wide-ranging management reshuffle, which appeared to place Mr Jain and Mr Fitschen at the heart of its restructuring strategy.

It also came two days after the bank began an investigation after discovering that some of its Russian clients may have used it to launder about $6 billion over a four-year period.

Deutsche Bank has paid out more than €9 billion in fines since 2012, with another €4 billion expected this year. In April the bank was hit with a $2.5 billion fine for lying to regulators after its London division was found to be at the centre of a conspiracy to boost its profits and staff bonuses by manipulating key rates used to set ordinary interest rates across the world.

Deutsche Bank’s London and US divisions are also in “special measures”, which means they face “enhanced supervision” by regulators because of serious concerns over how they are run.

Market sources speculated yesterday that the bank’s sudden about-face on its executive leadership could be a result of growing pressure from global regulators and investors keen for fresh leadership to help to restore confidence.

At last month’s annual meeting, leading investors criticised Mr Jain and Mr Fitschen for not providing enough detail on a proposed five-year recovery plan and they emphasised that the bank’s profitability was still a big issue.

The bank said that Mr Jain, a veteran trader and investment banker, would step down at the end of this month but would remain as a consultant until the end of the year. Mr Fitschen will remain in his role until the annual meeting next May, at which point Mr Cryan will become the sole chief executive.

Mr Cyran was educated at Cambridge University and is a fluent German speaker. Before joining Deutsche Bank, he was European president of Temasek, the Singapore investment company, and the chief financial officer of UBS.

Paul Achleitner, chairman of the supervisory board of Deutsche Bank, said that the decision of the two men to step down early “demonstrates impressively their attitude of putting the bank’s interests ahead of their own” and that Mr Jain had “earned a place in our bank’s history as an executive who helped to transform Deutsche Bank into the global leader, rooted in Germany, that it is today”.

One top City contact close to Mr Jain said that it was “absolutely his decision to resign and now was the right time to leave”. He added that Mr Jain had experienced a “bloody tough three years” as co-chief executive and had not received enough credit for his work in “cleaning up” Deutsche Bank and creating a host of profitable divisions, particularly its investment banking and asset and wealth management operations.

In April the bank reported that first-quarter profits had halved to €559 million after it was hit by a record fine, off revenue that had surged to near-record levels of €10.4 billion.

Mr Jain, said: “It has been 20 years this month since I came to work at Deutsche Bank and it has been an extraordinary time.

“Over the past three years, I have been afforded the privilege and honour to lead this great institution together with Jürgen. In our time as the bank’s leaders, we have boosted capital, reduced exposures and risk and invested significantly in technology, control and compliance capabilities.”