The Deutsche Bank model of dual chief executives is apparently becoming fashionable in the German financial sector.
On October 1, two managers will take the reins of the nationalized real estate lender Hypo Real Estate (HRE) and its mortgage lender unit, pbb.
In a meeting of the supervisory board on Friday, Thomas Köntgen was named co-chief executive of the Munich bank along with Andreas Arndt, who had been in charge of finance. The duo replaces the former chief executive, Manuela Better, who unexpectedly resigned in June.
Mr. Arndt took over day-to-day management at that time and a search was launched for a new chief executive.
Friday’s decision was a surprise move and a source familiar with the situation told Handelsblatt that it “needs to be explained.”
The insider pointed to many challenges ahead, above all the privatization of pbb, which must be completed by the end of 2015 at the direction of the European Commission. This will be no easy task – especially after plans for selling its public finance unit Depfa were suddenly canceled after Germany’s bank bailout authority, Soffin, opposed them. That led to Ms. Better’s resignation.
The German government bailed out HRE after it collapsed in the wake of the Lehman Brothers bankruptcy. The bank received a €10 billion capital injection and €146 billion in liquidity guarantees, making it answerable to officials in Berlin.
HRE and pbb are anything but easy to manage, since they’re state-owned. That difficulty has been demonstrated before by the departures of Ms. Better and her predecessor, Axel Wieandt.
Since the pbb privatization will take place soon, not much time remains for a new boss to learn the ropes. So Mr. Arndt, in addition to his responsibilities as head of finances, will prepare the bank for a change of owners. In the meantime, Mr. Köntgen is charged with supervising business operations.
The 47-year-old will benefit from his experience in real estate financing. For more than 16 years, Mr. Köntgen was with Hypothekenbank Frankfurt, which used to be called Eurohypo. At the end of 2013, however, his position was eliminated as part of austerity measures at Commerzbank.
Now the manager from the Rhineland has a three-year contract in Munich.
Whether he stays that long remains to be seen. The bank must be privatized in less than 18 months. Also, pbb and HRE are anything but easy to manage, since they are state-owned. That has been clearly demonstrated before by the departures of Ms. Better and her predecessor, Axel Wieandt.
This article was translated by George Frederick Takis. Greg Ring also contributed. The author covers the banking and insurance industries for Handelsblatt from Munich. She previously covered the financial sector in Frankfurt for Handelsblatt, Reuters, vwd and Börsen-Zeitung in Frankfurt. To contact the author: email@example.com