Changing of the guard at Deutsche Bank: chief controller Achleitner resigns after ten turbulent years. The starting conditions for his successor seem better than in 2012.
Paul Achleitner strikes a self-critical note when saying goodbye: “I too assessed the starting conditions in 2012 differently than they appear today in retrospect,” admitted the outgoing Chairman of the Supervisory Board of Deutsche Bank at his last Annual General Meeting.
«The path to the new reality was not always a straight one. (…) And mistakes were made, and yes, I made mistakes too.” His successor will be Alexander (Alex) Wynaendts (61), whom the shareholders elected to the control committee with a large majority at the online general meeting.
When the former investment banker Achleitner took over one of the most important posts in the German economy at the end of May 2012, the outgoing CEO Josef Ackermann promised a “swept clean” house. The fact that the bank got through the financial crisis of 2007/2008 relatively well got to the heads of those responsible at the time, says Klaus Nieding, Vice President of the German Association for the Protection of Securities (DSW): “The consequence of this mixture of hubris and arrogance was essentially ours Employees and we owners have to pay for it.»
Gradually, the mountain of expensive legacy assets grew larger, which cost Germany’s largest financial institution a great deal of money and severely damaged Deutsche Bank’s image. But the truth also includes: While the US competition cleared out balance sheets immediately after the financial crisis, the Frankfurt-based Dax group was looking for a clear course for years. “The need for restructuring at Deutsche Bank was particularly great and the restructuring was tackled too late,” criticizes Alexandra Annecke, fund manager at Union Investment, on Achleitner’s departure after ten years in office.
Instead of playing in the Champions League, the once proud institution, in the style of football clubs threatened with relegation, wore out one coach after the other. Christian Sewing, who was promoted to CEO in April 2018, is the fourth CEO in the era of Bayern Munich fan Achleitner, although he did not install the initially acting duo Anshu Jain/Jürgen Fitschen himself.
The longer Deutsche Bank muddled through – sometimes Postbank was supposed to be sold, then it was integrated into the private customer segment – the louder the criticism of Achleitner became. In 2019, shareholders called for the “Achleitner system to be deselected”.
Has Achleitner, who was celebrated as a deal-maker in the past, stuck to the wrong managers for too long? The fact that the investment banker Jain as co-head (June 2012 – June 2015) would clean up with the excesses of the capital market business and promote a “cultural change” was considered questionable by critics when Jain was appointed. After that, Achleitner brought in John Cryan as a reorganizer (July 2015 – April 2018), but dropped the Brit again despite his relentless analysis of the plight of the financial institution.
“Spiegel Online” quotes analyst Dieter Hein from Fairresearch with a harsh judgment: “It was ten years lost. The shareholders can be happy that Achleitner will soon be gone.” In his farewell speech at the online general meeting, the person so scolded defended: In 2012 it was not foreseeable that “a fundamental restructuring” would ultimately be necessary, “which would de facto take a decade”.
The trend reversal seems to have been successful with Sewing. The bank’s business has recently been better again, the share price has left the record low of just under 4.45 euros a good deal behind. Last year, the group achieved the highest annual profit since 2011, the current year began with a profit in the billions in the first quarter.
After two rounds of zero, shareholders should again receive a dividend of 20 cents per share for the 2021 financial year. By 2025, the board wants to pay out around eight billion euros to the shareholders – a step that is overdue from the point of view of many shareholders, after all the bank paid high bonuses to investment bankers even in lean years.
In the opinion of Andreas Thomae from Deka Investment, Achleitner has finally set the right course after strategy changes, personnel changes and years of losses: “The restructuring with a focus on strengths has been successful, the right management team is at the helm and the bank is generally well regarded again by their Customers.” The task now is to consolidate profitability at a high level.
“We still have a lot of work ahead of us,” says CEO Christian Sewing. In fact: by the end of 2022, the board of directors wants to increase the return on tangible equity to eight percent, and by 2025 it should even be more than ten percent after taxes. In 2021 as a whole, it was just 3.8 percent.
But: “Pride” is again a frequently used word in speeches by Deutsche Bank management. He is leaving the institute “with the deep conviction that we have all set the course for a successful future together over the past few years – strategically as well as personally,” summarizes Achleitner. Sewing seconded: “You leave us and your successor a well-ordered house.”
The bank then plays a minute-long video in which current and former colleagues praise Achleitner for “tireless commitment” to the benefit of Deutsche Bank. The Austrian, briefly visibly touched, had previously moderated his successor to the supervisory board, the Dutchman Wynaendts, who had been picked out in the fall.
The day after Eintracht Frankfurt won the Europa League, football fan Achleitner chose a sporting comparison: “You can obviously win the Europa League from Frankfurt, even with an Austrian as a coach. For the Champions League you will definitely need a Dutch coach.” With the election of Wynaendts on Thursday, a new era begins at Deutsche Bank.
