Crisis-hit Deutsche Bank to push out British CEO

CEO of Deutsche Bank John Cryan speaks during the annual press conference in Frankfurt, Germany. (AP)
Updated 08 April 2018

Crisis-hit Deutsche Bank to push out British CEO

BERLIN: Trouble-plagued Deutsche Bank is to oust its British CEO John Cryan and replace him with one of his deputies Sunday, media reported, in a bid to get Germany’s biggest lender back on track after years in crisis.
Following weeks of speculation, the move is to come late Sunday during a supervisory board meeting at the bank’s Frankfurt headquarters.
News weekly Der Spiegel and business newspaper Handelsblatt said the bank would tap Christian Sewing, 47, currently a deputy CEO and head of private banking, to take over in May from Cryan, who has been at the helm since 2015.
Deutsche Bank, which declined to comment on the Spiegel report, called the surprise meeting “to discuss the chairmanship and to take a decision the same day,” it said in a statement Saturday.
While Cryan’s contract runs until 2020, press reports in recent days have suggested a rift over strategy with supervisory board chairman Paul Achleitner, who called Sunday’s meeting.
The choice of Sewing over investment banking chief Marcus Schenck, who had been discussed as a possible successor to Cryan, points to a strategic shift toward retail banking in its home market Germany.
Sewing “is popular among staff in Germany but is likely to meet with skepticism among foreign investment bankers,” Handelsblatt said, adding that Schenck was now expected to leave the bank in the coming months.
Given sole command of the lender in 2016 after the departure of co-CEO Juergen Fitschen, Cryan’s task was to restructure Deutsche and clean up the toxic legacy of its pre-financial crisis bid to compete with global investment banking giants.
He has neutralized the worst legal threats, in part by paying billions in fines and compensation, strengthened Deutsche’s capital foundations with an 8-billion-euro ($9.8 billion) share issue last year and floated asset management division DWS on the stock market in March.
But “the financial results have so far not been what all of us would want them to be,” Cryan, 57, acknowledged in a letter to employees last month while fighting to keep his job, referring to an unexpected 751-million-euro loss reported for 2017.
While the bank said the loss was a one-off caused by US President Donald Trump’s corporate tax reform, investors have shunned Deutsche since the start of the year, with its stock dropping around 30 percent in value since January 1.
Handelsblatt said last month that Deutsche Bank remains “what it was when Cryan took the helm: a chronic patient.”
Cryan was seen as a troubleshooter after his successful steering of Swiss bank UBS through the financial crisis as finance director between 2008 and 2011.
But he met his match with the German lender.
“It was clear from the beginning that Cryan’s time in office would be limited and that his job would be ‘clearing up past mistakes’. He’s not a charismatic leader personality or a visionary,” professor Sascha Steffen of the Frankfurt school of finance told Handelsblatt.
“He had to battle serious problems that his predecessors swept under the rug for years,” Markus Riesselmann, analyst at Independent Research, told AFP.
“He’s largely cleared those up and now it looks like Deutsche can’t turn things around regarding margins. But I doubt a new CEO could successfully make that transition. It seems rather to be a fundamental ‘Deutsche Bank problem’.”


Cirque du Soleil walks a tightrope through pandemic

Updated 06 June 2020

Cirque du Soleil walks a tightrope through pandemic

  • Suitors wage backstage battle to rescue debt-stricken Canadian circus icon
  • Among the potential bidders is former fire eater Guy Laliberte, who fouded the acrobatic troupe in 1984

MONTREAL: Its shows canceled due to the COVID-19 pandemic, an already heavily indebted Cirque du Soleil’s fight for survival has invited an intense backstage battle to try to save the Canadian cultural icon.

High on a list of potential suitors is former fire eater Guy Laliberte, who founded the acrobatic troupe in 1984 but later sold it.

“Its revival will have to be done at the right price. And not at all costs,” said the 60-year-old, determined not to see his creation sold to private interests.

The billionaire clown said after “careful consideration,” he decided “with a great team” to pursue a bid, but offered no details.

Under his leadership, the Cirque had set up big tops in more than 300 cities around the world, delighting audiences with contemporary circus acts set to music but without the usual trappings of lions, elephants and bears.

Then the pandemic hit, forcing the company in March to cancel 44 shows worldwide, from Las Vegas to Tel Aviv, Moscow to Melbourne, and lay off 4,679 acrobats and technicians, or 95 percent of its workforce.

Hurtling toward bankruptcy, the global entertainment giant and pride of Canada commissioned a bank in early May to examine its options, including a possible sale.

Meanwhile, shareholders ponied up $50 million in bridge financing for its “short-term liquidity needs.”

Laliberte, the first clown to rocket to the International Space Station in 2009, ceded control of the Cirque for $1 billion in 2015.

It has since fallen into the hands of American investment firm TPG Capital (55 percent stake) and China’s Fosun (25 percent), which also owns Club Med and Thomas Cook travel. The Caisse de depot et placement du Quebec (CDPQ) retains the last 20 percent.

The institutional investor, which manages public pension plans and insurance programs in Quebec, bought Laliberte’s last remaining 10 percent stake in the business in February, just before the pandemic.

Since 2015, the Cirque has embarked on costly acquisitions and renovations of permanent performance halls, while its creative spirit waned, according to critics in the Quebec press.

Meanwhile, it piled on more than $1 billion in debt.

Fearing that the Cirque would be “sold to foreign interests,” the Quebec government recently offered it a conditional loan of $200 million to help relaunch its shows as restrictions on large gatherings start to be eased worldwide.

But the agreement in principle is conditional on the Cirque headquarters remaining in Montreal and the province being allowed to buy US and Chinese stakes in the company at an unspecified time in the future, “at market value” and with “probably a local partner,” said Quebec Minister of the Economy Pierre Fitzgibbon.

“The state does not want to operate the circus, but the circus is too important to Quebec (to leave it to foreigners),” he said.

In addition to Laliberte, other prospective buyers include Quebecor, the telecoms and media giant of tycoon Pierre Karl Peladeau, whose opening lowball bid was outright rejected.

“It is essentially the value and reputation of the brand” that has piqued interest in the company, says Michel Magnan, corporate governance chair at Concordia University in Montreal.

But “as long as there are restrictions on gatherings of people, the future is not very rosy” for the Cirque, he said.

Several challenges await, according to Magnan.

“There were a lot of people working in all of these shows. Where are they now? What are they doing? How are they doing? In what shape are they, what state of mind?” he said.

“The more time passes, the more this expertise risks evaporating.”

Small consolation: The Cirque resumed its performances on Wednesday in Hangzhou, China, five months after a coronavirus outbreak in the city.