When Garth Ritchie left Deutsche Bank at the start of the current restructuring program, Deutsche Bank CEO Christian Sewing announced that for the time being, he would assume direct responsibility for the investment banking operations himself. Even though Sewing is a retail banker by trade, this probably seemed a good idea at the time. – If there’s no incumbent head of investment banking, there’s no one to object to cost cuts in the investment bank. Two months on, it seems Sewing is having second thoughts. It turns out that if you have even the slightest tendency toward micromanagement, an investment bank the size of Deutsche’s can turn into a horrific time sink.
For the past two months Sewing has effectively been doing two jobs for his €3.3m salary. He’s CEO of the whole bank and he’s also a very vigourous CEO of the investment bank. It’s all becoming too much. Bloomberg says that 49 year-old Sewing (who clearly tends towards micromanagement and perfectionism) has been talking to all his direct reports in the investment bank nearly every day, flying around to stay in touch with key clients and personally signing off on all new hires. He’s presumably also having to stay on top of those Brexit preparations for which Garth Ritchie demanded a substantial role-based allowance and, hopefully with some help from the remaining divisional heads, running the retail bank, corporate bank and wind-down unit. Plus he’s overseeing DWS. It’s the kind of workload that people admire you for to begin with, but over time they grow progressively more and more frustrated at the difficulty of getting any time on your calendar. There’s also a personal toll – the sleepless nights and breakdown of António Horta-Osório at Lloyds should be a reminder to any CEO that the job can get the better of you.
It’s therefore not surprising that according to “people familiar with the matter” (although an official Deutsche statement denies this), Mr Sewing is considering whether it’s time to appoint a head of investment banking once more. There are some potential internal candidates – Stefan Hoops, Mark Fedorcik and Ram Nayak are the current direct reports in charge of corporate banking, capital markets and trading respectively. And Christiana Riley (former CFO of the investment bank, promoted to regional CEO of North America as a reward for helping design the restructuring plan) could certainly be considered a candidate. But the gossip is apparently pointing toward an external hire.
Who then? Normally, when there’s a big role to fill, you look for big hitters who are currently on the market, and there are quite a lot of those at present. But Christian Meissner and Jamie Forese are unlikely to be interested in roles which don’t have a pretty clear path to the CEO office, and Andrea Orcel might be difficult to slot into a strategy that’s meant to be driven by reduced horizons and cost-cutting. For similar reasons, it might be difficult to raid Morgan Stanley’s bench, which is currently dominated by potential successors to James Gorman. Goldman Sachs appears to be shedding partners at quite a rate at present, but their most prominent German-speaker, Marc Nachmann has just been promoted.
It might be more likely to look to Europe. Jonathan Wills and Tadhg Flood are both Deutsche alumni who were involved in the UBS merger talks earlier this year. SocGen’s Didier Valet might be available and has experience in managing an investment bank through adversity. But a possible left-field candidate might be Martin Blessing. He’s not got much direct experience of investment banking, but nor did he have much of wealth management before taking that job at UBS. As a former CEO of Commerzbank, he might be one of the few people in the world truly able to understand what Christian Sewing is going through.
Daniel Davies – Read more on efinancialcareers.com