John Cryan

The Iceman Cometh

Deutsche Bank (4)
Swiss bank UBS cut investment banking operating costs by 36 percent between 2009 and 2013, a process started by its then CFO John Cryan. Analysts hope Mr. Cryan will display the same rigor as the new CEO of Deutsche Bank, which cut costs just 15 percent over the same period.
  • Why it matters

    Why it matters

    John Cryan’s actions at UBS provide a window into what he will do as CEO of Deutsche Bank, and suggest he will take a long hard look at any divisions where the bank is failing.

  • Facts

    Facts

    • John Cryan took over as co-CEO of Deutsche Bank in July, replacing Anshu Jain, and will become the bank’s sole chief executive after co-CEO Jürgen Fitschen steps down next May.
    • Mr. Cryan served as CFO of Swiss bank UBS from September 2008 to June of 2011.
    • UBS is the world’s biggest asset manager among banks. Deutsche Bank ranks 12th.
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    Audio

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If John Cryan’s time at Swiss bank UBS is a guide, Deutsche Bank is in for a major downsizing.

The British banker, who took over as chief executive of Germany’s largest bank in July, is credited with laying the groundwork that turned UBS from a state-supported financial welfare case into an asset-management behemoth in just a few years after the 2008 financial crisis.

But according to people familiar with Mr. Cryan in Zürich, Mr. Cryan did much more than that. He also helped change the character and culture of UBS, opening up its books to greater scrutiny and abandoning the idea that UBS could be a major global bank that was all things to all people.

That cultural change started with being brutally honest about the bank’s dire state as well as its many legal sins before the 2008 crisis. It continued with the bolstering of cash reserves to put UBS on a more solid financial footing than peers, and it ended with an aggressive, often painful restructuring that gutted the Swiss bank’s investment banking division, sources said.

Mr. Cryan forced the bank to abandon its unrealistic dream of becoming a global investment banking powerhouse and refocus on what it did best – helping wealthy clients manage their assets.

“For me, it really was a clear strategic shift that UBS carried out. Other banks didn’t go nearly as far. UBS has no classic investment banking to speak of anymore,” said Manuel Ammann, a veteran Swiss banking analyst and head of the Swiss Institute of Banking and Finance at St. Gallen University.

Mr. Cryan’s aggressive cost cutting took UBS from one of the most bloated banks to one of the leanest in the world. The bank’s operating expenses in its investment bank fell from 9.8 billion Swiss francs in 2009 to 6.3 billion Swiss francs by 2013. Its total balance sheet plummeted from €1.351 trillion in 2008 to €883 billion last year.

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