Deutsche Bank chiefs quit after rate-fixing and cover-up scandals

The announcement comes just weeks after US and UK regulators fined Deutsche a record $2.5bn

Deutsche Bank's co-chief executives, Anshu Jain and Jurgen Fitschen (Reuters)

The veteran British banker John Cryan is to replace Anshu Jain as co-chief executive of Deutsche Bank after the shock resignation of the German giant’s joint chief executives this weekend.

Germany’s biggest bank announced the Mr Cryan, who helped to turn around the Swiss bank UBS, would take over from Mr Jain on 1 July after its supervisory board held an emergency meeting in Frankfurt on Sunday.

Jürgen Fitschen, Deutsche’s other co-chief executive, will stay on until the bank’s next annual meeting in May 2016, when Mr Cryan will become the sole boss.

The announcement comes just weeks after US and UK regulators fined Deutsche a record $2.5bn (£1.7bn) for rigging benchmark interest rates, including Libor, and slammed the bank for trying to cover up the offences.

The City watchdog’s Georgina Philippou condemned Deutsche for “repeatedly misleading us” during the Libor investigations, while US regulators demanded that seven staff, six of whom were still working in Deutsche’s London-based investment bank, be fired.

Mr Jain, an Indian-born Briton, joined Deutsche in 1995 and built up the London investment bank – known inside the German bank as “Anshu’s army” – before he became co-chief executive in 2012.

But though he accepted responsibility as the man in charge when Deutsche’s investment bankers were fiddling the benchmark rates, even after the record fine in April Mr Jain insisted he would not be resigning.

Deutsche has always said its senior management did not know what the traders were doing. The bank attempted to placate investors at the end of last month by announcing a boardroom shake-up that put Mr Jain in charge of shrinking its investment bank, selling off its retail Postbank business and cutting €4.7bn (£3.4bn) off costs.

The move, however, was not enough to silence all of its increasingly concerned shareholders, and only 69 per cent of investors endorsed the performance of Deutsche’s two ceos at its annual meeting on 21 May.

Just days later the bank announced that it had also paid $55m to the Wall Street regulator to settle – without confirming or denying – allegations that it hid paper losses of more than $1.5bn during the financial crisis.

And this weekend it emerged that Deutsche is investigating whether $6bn-worth of trades by its Russian clients, involving its London and Moscow offices, breached anti-money laundering rules.

Mr Fitschen, meanwhile, has been embroiled in a lengthy German court case that means he has to attend a criminal court in Munich once a week.

Prosecutors allege that former Deutsche executives – including Mr Fitschen –gave misleading evidence in a civil suit connected to the collapse of the German media giant Kirch Group in 2002. Mr Fitschen denies the charges.

Mr Cryan, who has been on Deutsche’s supervisory board since 2013, yesterday said he was looking forward to the task ahead. “Our future will be defined by how well we deliver on strategy, impress clients and reduce complexity,” he added.

Analysts said that Mr Cryan now needs to review Deutsche’s latest strategic plan, which was unveiled just ahead of the annual meeting last month.

“A lot of detail is still needed on it,” Chris Wheeler, at Atlantic Equities, told Reuters yesterday. “It’s a massive job still to do. It’s one of the world’s biggest investment banks and Germany’s national champion.”