Deutsche Bank

The Repo Man

Cryer DB frankfurt reuters dpa
John Cryan, the new CEO of Deutsche Bank, is the anti-banker banker, some of his former colleagues say.
  • Why it matters

    Why it matters

    John Cryan, a British banker, takes over Deutsche Bank at a critical juncture in its history, as the bank seeks to free itself from the legal excesses of its past and return to consistent profit.

  • Facts


    • Mr. Cryan will take over as CEO of Deutsche Bank on July 1; Jürgen Fitschen will remain co-CEO with him in a transitional phase until May 2016.
    • Mr. Cryan was Swiss bank UBS’s chief financial officer from 2008 to 2011, and reportedly left after disagreements with its then-chairman, Oswald Grübel.
    • Deutsche Bank’s stock price rose more than 8 percent Monday after his appointment, the greatest intraday increase in two years.
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Cultural change begins at the top – that seems to be the message that Deutsche Bank has reluctantly accepted on Sunday when its overseers appointed John Cryan, a British banker, to succeed Anshu Jain and Jürgen Fitschen as the bank’s chief executive.

Independent, detail-oriented and calm under pressure, as well as introverted, shy and maybe a bit boring, is how investors and some acquaintances described the U.K. national charged with pulling Germany’s largest bank out of its post-financial crisis slump.

In many ways, Mr. Cryan is the antithesis of one of the men he will be replacing, Mr. Jain, who made a career as a flamboyant investment banker in London, embodying the generation of go-go bankers whose actions led collectively to the 2008 financial crisis.

By contrast, Mr. Cryan – a consultant rather than investment banker by trade – remains relatively untarnished by the excesses and hubris that characterized Wall Street and London for much of the early 2000s.

Instead, he quietly built a reputation as something of a turnaround specialist.

Mr. Cryan has one other edge over the Indian-British national Mr. Jain: He speaks German, the result of spending a few years as a banking consultant in Munich early in his career.

“I know of nobody else who works problems and solutions with such a love of detail, coolness, precision and long-term perspective…and who sticks to his principles even under pressure,” said one top manager at a financial competitor, who has worked with Mr. Cryan in the past but declined to be named.

Deutsche Bank could use a bit of boring after years of tumult. That at least seems to be the view of the investors and shareholders, who helped topple the bank’s current leadership duo by revolting at an annual meeting earlier this year.

The bank’s share price rose more than 8 percent in Monday morning trading, the most in two years, before falling back slightly in the following hours. At 11:30 central European time, the share price remained up more than 5 percent on the day.

“It marks a very big chance for Deutsche Bank to end all discussions and problems with one strike,” said Martin Stürner, head of Frankfurt-based investment fund PEH Wertpapier. “The bank has potential, its stock is undervalued, trading below its book value. We will think about additional purchases on Monday.”

“I can imagine that Deutsche Bank’s share price will jump on Monday – but that doesn’t change the fundamental problems.”

Philipp Vorndran, Strategist, Flossbach von Storch

Deutsche Bank announced the dramatic change Sunday afternoon – a surprise announcement after it had seemed like Mr. Jain and his co-CEO Jürgen Fitschen had initially weathered the storm.

Mr. Cryan will start his job as chief executive in July, replacing Mr. Jain. Jürgen Fitschen, who has been running the bank together with Mr. Jain since June 2012, will remain as co-CEO for another year to help smooth the transition. After that, Mr. Cryan will run the bank on his own.

Like any politician entering office, Mr. Cryan can expect something of a honeymoon period as he becomes acquainted with the problems facing the bank. But it’s not likely to last very long – the laundry list of problems facing the bank is too long.

One of the five largest investment banks in the world, Deutsche Bank has long lagged behind many of its peers in terms of profitability. It is also considered more risky – its leverage ratio, a measure of assets compared to outstanding loans, is well below the average of major banks (see graphic).

“This is less about the heads of the bank than it is about the business model, and the current business models of most European big banks is not sustainable over the long term,” said Philipp Vorndran, capital market strategist for asset manager Flossbach von Storch. “I can imagine that Deutsche Bank’s share price will jump on Monday – but that doesn’t change the fundamental problems.”

Mr. Cryan’s biggest task will be to implement a two-month old strategic overhaul announced by his predecessors, which includes dramatically slimming down its retail banking operations and even includes cuts to its more lucrative investment banking business. The restructuring has been viewed as lackluster by many investors and likely played a role in Mr. Jain and Mr. Fitschen’s ouster. Whether Mr. Cryan will consider any broad changes, however, remains to be seen.


Deutsche Bank AG Hauptversammlung 2015 v.l.:  Achleitner, Jain, Fitschen
Chairman Paul Achleitner (left) made the decision that it was time for a change. Mr. Jain (middle) will leave at the end of June. Mr. Fitschen (right) will stay another year. Source: Bert Bostelmann for Handelsblatt.


The bank also remains burdened by thousands of lawsuits and regulatory investigations pertaining to wrongdoing in the run-up to the 2008 crisis. While Mr. Jain and Mr. Fitschen also only took over after the crisis, it was their long careers at Deutsche Bank and ties to a number of the legal transgressions that ultimately proved their undoing.

“The current heads were too strongly connected to the problems of the past to credibly stand for a new culture,” said Gerhard Schick, a spokesman on financial matters for the Greens, told Handelsblatt. “This fresh start would have best been already been started after the departure of Josef Ackermann… the new board must now clean house, especially in investment banking.”

The fact that these legal troubles will continue to be a burden was brought home this weekend. News of Mr. Cryan’s appointment was paired with revelations that Deutsche Bank could face yet another investigation by regulators – this time for an alleged money laundering ring between Russia and Britain.

Three employees have already been suspended as Deutsche Bank launched its own investigation into the practice. The allegation: Russian clients bought financial products at the bank in Moscow, paying in rubels, while 2,500 kilometers away in London, traders sold the corresponding amount in dollars. About $6 billion, or €5.4 billion, may have been laundered in this way.

Mr. Cryan is not a stranger to Deutsche Bank. Since 2013, he has served as a member of the bank’s non-executive supervisory board, which has the power to hire and fire managers and signs off on strategic changes. He oversaw internal auditing and risk compliance.

It was apparently no coincidence that the bank’s supervisory board chairman, Paul Achleitner, nominated Mr. Cryan to serve on the board two years ago. The British national was chosen “with the idea, in the back of the mind, that he had the make-up to move into the operational lead of the bank,” according to one source familiar with the matter.


Consistently Outperformed-01 (5)


Deutsche Bank wasn’t the only institution that saw Mr. Cryan’s potential. A few months ago, financial circles connected him to the top position at Credit Suisse and chairman of British bank Barclays. Whether he declined the jobs or was simply passed over in the end remains unclear.

His old boss, UBS, also saw his potential. During his three years as the bank’s chief financial officer, Mr. Cryan gained a reputation as a competent crisis manager, steering the bank through difficult times in the aftermath of the global financial collapse.

He had a tendency to avoid the limelight and public speeches, preferring to act in the background. He was a straight arrow and if anything, somewhat shy, as one former colleague described him. Another former colleague characterized him as a man of integrity, but not a charismatic leader. He needed a strong team around him.

The fact that he was passed up for the top position at UBS may have been part of the reason he resigned from his post in 2011. A year later he joined Singapore’s state-backed fund Temasek as head of European operations.

After two years in Singapore, he returned to London, where he continued working for Temasek as a consultant, but also seemed increasingly interested in his responsibilities on the supervisory board of Deutsche Bank, where he further burnished his credentials as a tough and independent-minded thinker.

“He asked exactly the right questions and didn’t shy away from critically questioning Mr. Jain,” said one colleague who knows him well.

The fact that he is not a total outsider is seen as a benefit by some shareholders, who helped topple the bank’s leadership by revolting against management in large numbers at the bank’s annual meeting less than a month ago.

“As it would have been difficult to bring in someone from the outside, this could be the best solution and be well-received by investors,” said Hans Hirt, the manager of British fund manager Hermes EOS, which had helped lead the revolt last month.


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Educated at the University of Cambridge and the auditing firm Arthur Anderson, Mr. Cryan worked as a classic banking consultant for much of his career, which has freed him of ties to many of the scandals that brought down traders at the world’s largest investment banks. He began his career as a consultant for the British investment bank SG Warburg, which was acquired by UBS in the mid-1990s.

At UBS, Mr. Cryan quickly rose up the ranks and was involved in consulting on a series of major deals before taking over as CFO in 2008. In 2007, he helped broker the sale of Dutch bank ABN Amro for €70 billion to three banks – a record at the time and one of his proudest moments, according to colleagues, even though the Dutch bank like many others had to be partly nationalized in the aftermath of the financial crisis.

It’s not only shareholders and investors that will be watching Mr. Cryan closely. Policymakers in Berlin have also long kept a close watch on the bank, effectively signing off on its restructuring announced in April. Party members have also loudly criticized the bank’s cultural failings.

While Deutsche Bank didn’t need a financial bailout in the aftermath of the 2008 crisis, the hit to its reputation from its legal mishaps has angered many in Berlin. The bank is simply too important to Germany’s economy and its role as a financial center to be left unwatched by politicians.

“It is therefore in the general interest to move forward with a great deal of transparency to ensure that this institution can once again take on this role unencumbered,” Christian Lindner, the head of Germany’s Free Democratic Party, told Handelsblatt.


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Holger Alich is Handelsblatt’s correspondent in Switzerland, Daniel Schäfer leads Handelsblatt‘s finance section in Frankfurt, Katharina Slodzcyk coverst he financial sector for Handelsblatt in London and Christopher Cermak is a financial editor for Handelsblatt Global Edition in Berlin. Michael Maisch, Peter Köhler and Laura de la Motte contributed to this article. To contact the authors:,, and

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