John Cryan

Deutsche Bank Turnaround Doubted

Mr. Cryan gets the Warhol treatment. Source: AFP [M]
Mr. Cryan gets the Warhol treatment.
  • Why it matters

    Why it matters

    • If Mr. Cryan cannot convince investors of his plan to turn around Germany’s largest bank, Deutsche Bank’s share price may continue to drop, raising pressure on him take more drastic, politically unpopular austerity measures.
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  • Facts

    Facts

    • Mr. Cryan’s plan focuses on strict cost-cutting and cutting 15,000 jobs, in part by selling off part of Postbank, a retail bank.
    • Deutsche Bank does not plan to pay dividends for two years – the first time in four decades shareholders won’t be compensated.
    • Mr. Cryan has said Deutsche Bank can no longer be a full-service global bank offering everything for everyone.
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    Audio

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When Deutsche Bank announced last June that John Cryan, a British banker from UBS, would be replacing Anshu Jain and his co-chief executive at the helm of Germany’s largest bank, investors had great expectations. Shares in Deutsche Bank jumped 8 percent on the news alone. But the euphoria didn’t last.

There are many reasons why the honeymoon ended so soon.

Some have to do with structural issues affecting all of Europe’s financial sector. It is not only Deutsche Bank that has had to cope with increasingly tough post-financial crisis regulation and near-zero interest rates.

Mr. Cryan faces a long to-do list. That puts him in a position similar to his banking industry peers, Tidjane Thiam of Credit Suisse and James Staley of Barclays.

They, too, took over financial institutions in 2015, and each faces an equally tough reconstruction task as Mr. Cryan does.

So far, the going has been rough for all three. The stock prices of Credit Suisse and Barclays have fallen 15 percent and 18 percent, respectively, under their new bosses. Those results are not exactly brilliant, but they look good compared with the 24-percent decline at Deutsche Bank since Mr. Cryan took over.

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