3 Min Read
FRANKFURT (Reuters) - Deutsche Bank (DBKGn.DE) reshuffled its management board late on Wednesday, consolidating restructuring authority under co-Chief Executive Anshu Jain while bidding farewell to its retail banking head Rainer Neske.
The reshuffle comes one day before the German bank holds what promises to be a stormy annual general meeting after shareholders openly expressed dismay at lagging profits, soaring fines and sluggish reforms.
The new board constellation consolidates accountability for an important cost-cutting drive and the bank’s strategic overhaul in the hands of Jain and chips some authority away from his counterpart and co-CEO Juergen Fitschen.
Fitschen ceded control of the bank’s non-core operations unit, comprised largely of assets the group seeks to discard, to fellow board member Stefan Krause.
Fitschen is burdened by what promises to be a lengthy court trial where prosecutors accuse him of attempting to mislead investigators in a long-running battle with the heirs of the Kirch media empire.
Jain, however, has also drawn fire from critics because of a perception that the bank dragged its feet on reforming the investment banking activities at Deutsche that he oversaw for years.
The reshuffle may go some way to assuage mounting shareholder concerns.
Shareholder adviser Hermes Equity Ownership Services on Wednesday called for an overhaul of Deutsche Bank's management board, saying management was late to restructure the business in the face of regulatory changes.
"Valuable time and credibility has been lost," Hans-Christoph Hirt, a director at Hermes EOS, said in a statement.
Rival advisory firm ISS has already recommended that Deutsche Bank investors should withhold their backing for management at the annual meeting.
In other moves, Deutsche put Krause, already scheduled to hand his chief financial officer title to fellow board member Marcus Schenck, in charge of overseeing the growing transaction banking division, an important component to the group's new strategy.
Deutsche will also seek to install Krause as supervisory board chairman of retail lender Postbank DPBGn.DE, which Deutsche aims to reform before selling it on the stock exchange by the end of 2016.
Deutsche confirmed that Neske will leave on June 30, after the group in April approved a restructuring calling for his division to be broken up and partially sold. He will be replaced by Christian Sewing, who is also responsible for legal matters.
Alan Cloete, the bank's co-Chief Executive Officer of Asia Pacific, will also leave Deutsche Bank in the near future, the lender said.
Prior to running Asia, Cloete was global head of finance and foreign exchange operations, which was the unit responsible for making the price submissions that formed the basis for key interest rate benchmarks such as Libor.
Colin Grassie, the Chief Executive for the bank's U.K. operations, will also leave, Deutsche said.
Reporting by Thomas Atkins; Editing by Edward Taylor and Andrew Hay