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New Deutsche Bank CEO warns staff will act to fix problems
[FRANKFURT] Deutsche Bank's new Chief Executive John Cryan told staff to prepare for tough reforms as he shakes up a group that he said had become too diversified and complex.
On his first day as CEO of Germany's largest bank, the 54-year-old Briton warned staff not to expect only "sweetness and light in the coming months," and that they must repair a reputation damaged by misconduct. "I can tell you that we will decisively identify problems, apply fixes and hold accountable those who misbehave," he said in a letter to staff that was posted on the bank's website.
Mr Cryan said he would stick with a strategy set in train by former co-CEO Anshu Jain but delay publication of details of the revamp by three months until the end of October.
Investors want to see the former investment banker, who has a reputation for swift action and straight talk, tackle a long list of problems that has pushed Deutsche Bank into a management crisis and depressed its share price.
Deutsche Bank was shaken after its two co-chief executives quit following a string of regulatory run-ins, failed promises and a shareholder vote of no confidence.
In a sobering welcome message, Mr Cryan said heavy fines had strained the bank's capital base, that relationships with regulators needed repair and decision-making had become slow and cumbersome. "We have become inward-looking and bureaucratic. Our confidence to engage with the outside world has been dented," he said.
Mr Cryan described the bank as too diversified and too complex, saying it was inefficient and burdened by ineffective processes, antiquated technology and unsuccessful investments, touching on criticisms raised separately this week by the head of German financial watchdog Bafin.
The new CEO vowed to close down business lines with poor prospects or standards. "We will narrow the scope of our activities. We do not have to be all things to all people." Deutsche Bank shares traded 2 per cent higher at 0900 GMT.
In April, the group's management outlined a new strategic roadmap for 2020 after falling far short of their 2015 promises. The plan, criticised by investors as short on substance, calls for selling the separately-branded Postbank chain, slashing some 4.7 billion euros (US$5.2 billion) in costs, closing some 200 retail branches, and carving some 150 billion euros from the investment bank's balance sheet.
Deutsche Bank has been plagued by fines and investigations, faces high operating costs and militant unions, and requires huge investments to modernise technology and restructure.