March 29, 2018 / 2:31 PM / a year ago

Big Deutsche Bank investors seek clarity on CEO: sources

FRANKFURT (Reuters) - Large investors in Deutsche Bank (DBKGn.DE) have urged its chairman to provide a clear signal on whether the board backs the lender’s embattled chief executive or not, sources close to the matter told Reuters on Thursday.

FILE PHOTO: Deutsche Bank CEO John Cryan addresses the bank's annual news conference in Frankfurt, Germany, February 2, 2018. REUTERS/Ralph Orlowski/File Photo

Separate sources had told Reuters on Tuesday that Germany’s flagship bank had begun looking for a new CEO to replace John Cryan to mollify investors frustrated by the slow turnaround of the loss-making lender.

Cryan said in a staff memo on Wednesday that he was “absolutely committed” to the lender. But Paul Achleitner, the board chairman who the sources said had initiated the search for a new CEO, has remained silent.

Two major investors contacted by Reuters said they had called Achleitner to ask him to provide clarity.

Cryan’s staff memo “looks like an affirmation that he at least wants to remain in his seat”, said one source with knowledge of the thinking of one of the large investors. “But where’s the confirmation from the board? Why doesn’t Achleitner say anything?”

A spokeswoman for Deutsche Bank declined to comment.

Cryan’s memo urged staff to “focus on executing” the bank’s strategy despite “widespread rumours”.

The bank’s strategy has come under criticism from some investors, who have grown impatient after three consecutive years of losses.

The CEO search, which the sources said was in its early stages, has come after a flurry of negative headlines for the bank. During the past two weeks, the bank said its loss in 2017 was larger than initially reported, and it has also warned about conditions in the first quarter.

A second major investor, speaking on condition of anonymity, said he was frustrated that Achleitner had not provided investors with an update following the reports this week of the CEO search.

Achleitner must find a strong candidate who can solve the bank’s problems in a sustainable way, the investor said. “No hasty solutions. That is important.”

“Cryan can remain from our point of view, though this will probably not be so simple anymore,” the person added.

Cryan and top managers at the bank have repeatedly called on patience, saying a turnaround would take years, not quarters.

The bank has raised capital and made progress with reforming its two retail banking divisions. Last week, it achieved a milestone in its turnaround by floating its asset management unit, DWS.

“We need to focus on executing on the strategy that was agreed and signed off by both the management and supervisory boards. There is no difference of opinion here,” Cryan wrote to staff on Wednesday.

Reporting by Tom Sims and Andreas Framke; Editing by Arno Schuetze, David Goodman and Mark Potter

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