CEO chair in sight? Anshu Jain can actually believe so

His name has been doing the rounds for the CEO’s post for quite some time now. But the India-born Anshu Jain may have to wait just a little bit longer.

Deutsche Bank on Monday took a step closer to endorsing investment banking chief Jain and Germany chief Juergen Fitschen as co-chief executives, but there are still obstacles to be overcome.

[caption id=“attachment_39440” align=“alignleft” width=“380” caption=“Deutsche Bank’s succession process centres on how to keep investment banking boss Jain. Alex Domanski/Reuters”] [/caption]

The bank is on the lookout for a leader to replace current Chief Executive Josef Ackermann. Key members of the chairman’s committee met on Sunday to debate a solution, a person familiar with the matter said.

The executives looked set to back the Jain-Fitschen proposal put forward by supervisory board chairman Clemens Boersig, a person familiar with the talks said on Sunday, although some objections remain. The committee tasked with pre-selecting Deutsche’s future leaders still needs to get the proposal endorsed by the entire 20-member supervisory board.

Supervisory board chairman Boersig had put forward the Jain-Fitschen model, according to German paper Die Welt, while Ackermann favoured the combination of Jain together with Chief Risk Officer Hugo Baenziger.

“The final word has not been spoken,” a supervisory board source told Reuters on Sunday. A key worry is that Fitschen, who is aged 63, may not stay for the full term that Jain, aged 48, will likely remain at the helm, a person familiar with the talks said.

Deutsche Bank’s succession process centres on how to keep investment banking boss Jain. That is despite the view among key members of the supervisory board and Ackermann that it is too early for him to be a standalone CEO, sources told Reuters.

Ackermann had favoured external candidate Axel Weber, but Deutsche is now focused on internal candidates after the former Bundesbank head spurned the role to become chairman-designate at UBS.

Ackermann has no formal role in deciding succession but was present at the meeting in an advisory capacity, a person familiar with the talks said on Sunday. Deutsche has been on the lookout for an “all-rounder” who is respected by investment banking staff but who also can find acceptance in political circles in Berlin and the German corporate establishment.

Because London-based Jain does not speak fluent German and lacks a network of political support in Germany, the bank has been seeking a partner. Reuters reported in March that this could result in a co-CEO model.

Alongside Germany chief Fitschen, other possible candidates include retail chief Rainer Neske and Chief Financial Officer Stefan Krause. Some members of Deutsche Bank’s supervisory board have even discussed asking Ackermann to make himself available as head of the supervisory board, another person familiar with the talks said. Deutsche Bank on Sunday reiterated that Ackermann had no such plans and declined to comment on succession plans.

Deutsche Bank periodically had co-CEOs in the 1960s, 1970s and 1980s. While such a solution would solve the immediate succession question, a dual-CEO set-up might signal to investors that the bank couldn’t find a strong enough candidate, and could also cause tension between the global investment banking and domestic commercial banking sides of the business, analysts said.

“There are very few examples where dual leadership has gone well, but I can see the charm of such a solution in this case,” said Daniel Hupfer, who helps manage about $46 billion in assets, including Deutsche Bank shares, at MM Warburg in Hamburg.

(With inputs from Agencies)