Deutsche Bank shares rise after chief John Cryan is ousted

Deutsche Bank shares rise after chief John Cryan is ousted

Deutsche Bank shares rise after chief John Cryan is ousted

Cryan is replaced by Christian Sewing, previously the deputy CEO and head of retail banking.

Mr Cryan, who is British, has clashed with Deutsche's chairman, Paul Achleitner, 61, and other colleagues over his belief that more substantial costs should be cut in the investment bank.

The shake-up was announced after an emergency meeting which ran late into Sunday night.

Cryan had been in charge since 2015 and his mandate would have expired in 2020, but investors had lost faith that he could return the bank to profitability.

Sewing said in his letter that he would thoroughly analyze how Deutsche Bank wants to position its investment bank in a hard market environment.

Sewing, who has replaced Cryan, wrote in a letter published on the bank's website: "The priority is to leverage our strengths and to allocate our investments accordingly".

His appointment could suggest a shift in emphasis away from a strategy of seeking profit growth through the investment bank and giving investment bankers greater influence. A spokeswoman for Deutsche Bank declined to comment on Sunday.

Sewing, a German national, would replace Cryan, a Briton, at a time when the bank is trying to strengthen its brand in its home market.

That followed losses of €6.8bn in 2015 and €1.4bn in 2016.

But his efforts haven't been enough to bring the company, which has been dogged by problems dating from the 2008 financial crisis, back into the black. He closed hundreds of bank branches and axed tens of thousands of jobs.

But he could not effectively arrest the bank's slide, which has been compounded by billions of euro in regulatory fines and the financial fallout of low interest rates in recent years.

The leadership debate also parallels concern about the direction of Deutsche's investment bank, whose swift expansion in the years leading up to the financial crisis is blamed for numerous bank's current woes.

In June 2016, Germany's biggest lender also failed the United States stress test, assessing how the bank would perform in a financial crisis.

Deutsche Bank and Banco Santander's USA unit were the only two of 33 banks to fail the test to see how they would perform in a financial crisis.

"He's largely cleared those up and now it looks like Deutsche can't turn things around regarding margins".

Image copyright Getty Images Image caption Christian Sewing has been described as strong and disciplined. DZ Bank AG reissued a "neutral" rating on shares of Deutsche Bank AG in a research report on Thursday, August 25th.

"The Supervisory Board is convinced that he and his team will be able to successfully lead Deutsche Bank into a new era", Achleitner said in a statement.

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