Troubled Deutsche Bank plans board shifts

Deutsche Bank is preparing to reshuffle its supervisory board as the future of CEO John Cryan and chairman Paul Achleitner is called into question.

John Thain, a former CEO of Merrill Lynch, is expected to join the troubled German bank in May, according to a person with knowledge of the lender’s plans.

Thain was one of four nominees invited by the supervisory board to fill positions coming open in 2018, said the person, who asked not to be identified.

Cryan has been struggling to retain investor backing amid a slump in revenue despite resetting strategy since taking over in 2015. Concerns about the bank’s turnaround prompted Achleitner to hold discussions with potential successors, people with knowledge of the discussions said last week.

The chairman is coming under fire for having failed to forge a recovery after going through three CEOs in six years.

“I welcome the overhaul of the supervisory board, although I would have liked to see it happen earlier,” said Andreas Meyer, who manages Deutsche Bank bonds at Aramea Asset Management.

Meyer noted the shift to more directors with financial sector backgrounds on the board.

“Should Achleitner decide to replace Cryan, he has to step down as well,” said Meyer.

“He has been chairman of the supervisory board since May 2012 and that means he shares responsibility for the situation.” Speculation about Cryan’s position prompted the executive to tell staff on March 28 that he was committed to serving the bank and continuing his work.

It is the latest challenge to hit Europe’s largest investment bank, which has struggled to recover from the financial crisis that exploded in 2008. A sustained slide at the investment bank has contributed to hundreds of job cuts as the firm seeks to curb costs and improve returns. The share price has fallen nearly 30% since the start of 2018.

The bank is conducting a fresh review of its trading businesses. Cryan was examining activities in which the bank was trailing competitors to determine if it should try to win back market share or exit, said people familiar with the review.

The relationship between Achleitner and Cryan has been strained for a while.

The chairman has been critical of the CEO’s performance and was taken aback in 2017 when Cryan discussed the prospect of a contract renewal beyond 2020 in interviews with Bloomberg and Handelsblatt, according to people familiar with the matter.

THE CHAIRMAN IS UNDER FIRE FOR HAVING FAILED TO FORGE A RECOVERY … WITH THREE CEOS IN SIX YEARS