Crisis-hit Deutsche Bank picks retail banker as new CEO

Mr Christian Sewing (far right) was named to succeed Briton John Cryan on Sunday, ending weeks of turmoil at Deutsche Bank.
Mr Christian Sewing (right) was named to succeed Briton John Cryan on Sunday, ending weeks of turmoil at Deutsche Bank.PHOTO: EPA-EFE

FRANKFURT • The era of investment bankers calling the shots at Deutsche Bank appears to be over.

Mr Christian Sewing - a three-decade veteran of the Frankfurt-based lender and retail banking executive - was named to succeed Briton John Cryan after a meeting of the bank's supervisory board late on Sunday. The decision ended a dramatic few weeks of turmoil at Europe's largest investment bank as Mr Cryan fought for his position and chairman Paul Achleitner quietly approached potential replacements.

Mr Sewing's ascent marks the return of a German national as sole CEO for the first time in 16 years. As part of the overhaul, Mr Garth Ritchie will lead the investment bank - which remains at the core of the bank's problems - and was elevated to co-deputy CEO with chief administrative officer Karl von Rohr.

At first glance, Mr Sewing, 47, seems chosen to complete the task that Mr Cryan began but failed to complete quickly enough - that of shrinking Deutsche's investment bank and making a coherent whole out of its domestic retail and commercial operations.

Having joined Deutsche as an apprentice in the homely Westphalian town of Bielefeld, Mr Sewing marks a contrast with globe-trotters such as former CEOs Josef Ackermann and Anshu Jain. He has worked most of his life at Deutsche - except for a two-year stint at a smaller lender - and commutes back to his wife and four children in Osnabrueck on weekends, more than 320km away from the German financial capital.

Mr Sewing burnished his standing within the bank in recent years by managing the downsizing of its domestic operations, and by curtailing the excesses of its investment bankers. He notably cut 188 branches and about 4,000 jobs from the German retail unit without provoking a strong backlash from the local media, for whom Deutsche is a favourite punching bag.

He also took charge of the internal probe into alleged money laundering at Deutsche's Russian business, prompting the bank to shutter its securities unit there.

"Sewing may not necessarily have been the top candidate, but he was there and stood ready," said banking and finance professor Hans-Peter Burghof at the University of Hohenheim in Stuttgart.

Mr Sewing's promotion raises big questions over the future of Deutsche's investment bank, the source of most of its profits, but also of its most expensive governance scandals. The bank had to pay US$7.2 billion (S$9.5 billion) last year to settle a US Justice Department probe into its mis-selling of mortgage-backed securities before the financial crisis, and it has also incurred heavy fines for manipulating benchmark interest rates and for its lax anti-money laundering controls in Russia.

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A version of this article appeared in the print edition of The Straits Times on April 10, 2018, with the headline 'Crisis-hit Deutsche Bank picks retail banker as new CEO'. Print Edition | Subscribe