The first European banking regulator is putting pressure on Deutsche Bank to accelerate the search for a successor to the presidency of Paul Achleitner, who leaves in May 2022 when his second five-year term expires.
The European Central Bank has repeatedly ordered Germany’s largest lender to present a clear succession plan in recent months, people reported on the matter to the Financial Times.
“Corporate governance is a key regulatory priority [for the ECB]”, One of the people said, adding that succession was a key matter for the discussion between the bank and the regulator.
The person added that the ECB wanted to participate in the decision but was concerned that Deutsche would present the appointment as a fact coinciding with next year’s annual shareholders ’meeting.
Reuters was the first to report the news. Both the watchdog and the bank declined to comment.
Achleitner will leave Deutsche next year after a 10-year stint in which Deutsche reported € 12 billion in cumulative losses, raised € 19.5 billion in new capital and announced five strategic reorganisations.
Its shares lost 60 percent of their value in that period. However, since Christian Sewing was appointed executive director in 2018 and launched into an ambitious cost cut and a partial retirement from the investment bank, performance has improved.
The Achleitner succession is managed by Mayree Clark, a member of Deutsche’s supervisory board since 2018 and founder and former managing partner of the American investment fund Eachwin Capital.
He replaced Achleitner as head of the supervisory board’s nomination committee last summer.
The bank has met with regulators on governance several times in recent years. In 2019, the ECB vetatu the appointment to the board of Deutsche of Jürg Zeltner, a former UBS banker who was also the head of the European private banking group KBL, backed by Qatar, a direct competitor of Deutsche.
In April, the German regulator BaFin publicly reprimanded Deutsche for poor anti-money laundering checks. The watchdog has extended and extended the mandate of a special representative parachuted into the bank in 2018 to monitor the lender’s progress in tightening its internal controls.
People familiar with Deutsche’s succession process said Clark had been in regular contact with the ECB.
Internally, three members of the bank’s supervisory board – nicknamed “the three Ws” – were seen as potential candidates: Theodor Weimer, executive director of Deutsche Börse, former head of PwC Germany, Norbert Winkeljohann, and former Volkswagen Chief Financial Officer Frank Witter.
Weimer could take his role only if he resigned from Deutsche Börse, where he has a contract until 2024. At a press conference earlier this year, he rejected the idea, saying it was not “at all a topic of discussion ”that could succeed Achleitner. Weimer declined to comment through Deutsche Börse.
Winkeljohann is already president of German chemical giant Bayer and a member of two other supervisory boards.
Witter, who was head of Volkswagen’s financial services army before becoming chief financial officer, joined Deutsche’s board just last month. No one immediately responded to an FT request for comment. Achleitner and Clark declined to comment.
The news that the ECB is unhappy with Deutsche’s management of the succession process is another issue in a week where two senior bankers renounced no longer an investigation in the potential mis-sale of foreign exchange derivatives that has pushed corporate clients in financial difficulty.
In addition, Deutsche warned investors Thursday that a court decision on the rights of bank accounts in Germany will blow a whopping 300 million euros into its year-round profits. James von Moltke, chief financial officer, also hinted that Deutsche could miss its 2022 cost reduction target, as next year’s bank tax will be higher than expected.