Deutsche Bank has replaced chief executive John Cryan with one of his deputies, Christian Sewing, the German lender confirmed after a meeting of its supervisory board.
The bank had said it would “take a decision” on the future of the chief executive today on a call led by the board’s chair, Paul Achleitner, who has previously sounded out candidates at other banks.
Cryan has come under intense pressure after presiding over the Frankfurt-based lender's third consecutive year of losses in 2017 since taking over in 2015.
Sewing, who has spent his entire career at Deutsche Bank, was Yorkshireman Cryan’s co-deputy, along with fellow German Marcus Schenck.
Schenck will now also leave the bank, with management board members Garth Ritchie and Karl von Rohr taking up the role of new presidents.
|Christian Sewing: Deutsche Bank lifer|
Schenck, formerly Sewing’s counterpart in charge of the investment bank who was seen by many in the industry as a contender for the role, had said he would leave the bank if not made chief executive, according to Der Spiegel magazine.
'"In his more than 25 years at Deutsche Bank Christian Sewing has proven himself a strong and disciplined leader," said Achleitner.
"The supervisory board is convinced that he and his team will be able to successfully lead Deutsche Bank into a new era. We trust in the great ability of this bank and its many talents."
The elevation of Sewing, currently co-head of the private and commercial bank, comes amid questions about the investment bank’s performance.
The investment bank, which employs many of the 7,000 Deutsche staff in the City, has struggled to keep pace with US rivals. The bank is currently reviewing its investment bank operations, with strategy understood to be a factor in discussions.
According to Octavio Marenzi, chief executive of capital markets consultancy Opimas, the investment bank is “the sick part of Deutsche Bank that needs to be addressed”.
He added Sewing’s appointment could prompt “a shift in the overall focus” from investment banking to retail or commercial.
Thomas Hallett, an analyst at Keefe Bruyette and Woods, said: “Whilst a change in CEO is negative, it shows the enormity of the task that lies ahead.
We believe Sewing to be the least disruptive choice to lead Deutsche Bank as it indicates continuity of the existing strategy with a shift in execution.
The bank’s investors have suffered as a result of the weak performance, with shares down by 29 per cent since the start of the year.
The announcement today marks an abrupt end to Cryan's stint as chief executive. He was brought in in 2015 as a safe pair of hands to cut costs but has failed to turn around the massive lender.
In February the bank reported a loss of €500m (£436m) for 2017, with Cryan himself saying the results were not satisfactory. The bank's finance chief, James von Moltke, later revealed that the bank faces significant headwinds during the current financial year as well, heaping further pressure on Cryan.
The chief executive tried to get onto the front foot before the Easter holidays by insisting he was "absolutely committed" to the job and pointing out that the strategy he was following was "agreed and signed off by both the management and supervisory boards".