In a radical and surprising move, Josef Ackermann, currently chief executive of Deutsche Bank, announced that he no longer plans to join the board as chairman after his retirement in May. This announcement comes as a surprise because not only is Mr. Ackermann a powerful figure within Deutsche Bank, his influence reaches both the rest of Germany and the rest of Europe. He has been the epitome of a public figure in European politics and banking, often providing advice to various European leaders. For example, over the past few months he has been known to provide informal advice to Chancellor Angela Merkel of Germany and has also contributed to discussions regarding Greek debt. Furthermore, as president of the Institute of International Finance, Mr. Ackermann has been a vocal opponent of new regulations for banks.
As for his role at Deutsche Bank, since he became chief executive in 2002, Mr. Ackermann has led the bank’s ascendancy as a major player on the global investment banking platform. Although expected to retire in May, Mr. Ackermann had decided to assume the role of chairman, which would still allow him considerable influence. At both Deutsche bank and other German institutions, the board is responsible for deciding on major decisions while the chief executive handles day-to-day operations. According to Mr. Ackermann, he is too busy to campaign for the chairman post and garner the support of necessary shareholders. Paul Achleitner, currently chief financial officer of Allianz, a German insurer, is expected to be the new nominee for the chairman position.
Mr. Ackermann’s announcement comes after months of internal disputes and uncertainty regarding the bank’s future leadership. The leadership crisis arose because of a crucial split regarding the necessary qualities required of a chief executive for a major German bank. The logical choice, favored by most investors, was Anshu Jain, head of the investment bank. Mr. Anshu joined Deutsche Bank in 1995 at the bequest of Edson Mitchell, who brought hoards of bankers with him from Merill Lynch. Mr. Mitchell planned to transform Deutsche Bank from a regional bank that focused on lending to an international banking powerhouse. Just as Mr. Mitchell reached the peak of his success at Deutsche Bank, he died of plane crash in 2000.
The heir to Mr. Mitchell’s transformations was Anshu Jain, who furthered his mentor’s work to the extent that his division now contributes $3.7 billion in pretax profit. Although Mr. Jain successfully plays the part of investment banker, he does not possess Mr. Ackermann’s German statesmanship. Born in India and based in London, Mr. Jain is neither fluent in German nor connected to other German leaders or institutions. At a bank that is central to both Germany’s economy and identity, many found it difficult to accept Anshu Jain as the sole chief executive. Therefore, as announced in July, the board decided to divide the position between Mr. Jain and Jurgen Fitschen, head of the German unit. Although Mr. Fitschen is not known at the global banking level, he is well connected in German circles.
Both Mr. Ackermann’s announcement and the dispute regarding the chief executive position raise the question of whether or not Deutsche Bank is ready to accept its position as a major international investment bank. Hopefully, the new leadership structure will be ready to further the bank’s continuing transition in terms of both geographical reach and identity.
By Meha Patel
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