Germany's second-biggest bank, Commerzbank, has announced it will have a new chief executive starting May 1. In the end, it appears the answer to its CEO search has always been right under the bank's nose.
After a three-hour meeting on Sunday, the supervisory board announced that Martin Zielke, who has long been responsible for the retail banking side of the operation, will be stepping into the top job.
Martin Blessing, who has led the troubled bank since 2008, will vacate the post after a surprise announcement in November that he would not renew his contract.
It's been a long time since the board has deemed it necessary to sit on a Sunday, but after months of searching, they finally managed to agree on an internal candidate to settle into the big chair.
The decision ended speculation that Commerzbank, which had to be bailed out during the financial crisis and is still partly state-owned, might have been leaning towards an external candidate.
The board also announced that Michael Mandel would move into Mr. Zielke's old office. Mr. Mandel, as an executive vice president, worked together with Mr. Zielke to clean up retail operations.
The promotion is widely being viewed as Mr. Zielke's reward for what's been hailed as his successful restructuring and streamlining of the private customer branch. The 53-year-old has been with Commerzbank since 2002, leading the private client and retail business since 2010.
A conceptually good idea is not the measure for how we operate our company. Martin Zielke, Commerzbank's incoming CEO
Bettina Orlopp, currently in charge of strategy, was also promoted to the bank's management board, becoming the first woman to enter the upper circle. The 45-year-old will run a new division pooling compliance, legal and personnel issues.
It marks the first expansion of the bank's management team since the board was cut back two years ago. The move cost the bank dearly. Chief human resources officer Ulrich Sieber sued successfully over his involuntary departure and received a tidy sum.
Now there's just one important post still open at Commerzbank: the soon to be empty chair of Klaus-Peter Müller, the bank's chairmen. Mr. Müller, who leads the bank's non-executive supervisory board, wants to vacate his post by the bank's 2018 general meeting at the very latest. According to insiders, the bank still hasn't found a candidate they could elect to the board this year. It's unlikely that Mr. Müller's successor will be chosen from internal candidates.
Few could have imagined the 53-year-old Martin Zielke as the charismatic front man of Germany's second-largest bank. He comes across as not particularly worldly, and can be a rather wooden speaker.
But what he lacks in eloquence, he makes up for in action. Mr. Zielke prefers to deliver results than speeches. That makes it easy for some to underestimate him.
His streamlining of the bank's retail branch, which carried him into the top job, is probably the best example. In the beginning, only Mr. Zielke and his team believed that his strategy would work. He wanted to retain a broad network of branches and brought to an end the practice of assessing staff weekly on their individual sales success.
The fact that he took the sales pressure off customer advisers brought him high regard from unions and staff councils alike. But management circles were skeptical. Some criticized Mr. Zielke's early appearances before top management as retail chief as boring, even soporific. Few were enthusiastic about his ideas.
“Many investment bankers, especially, had their doubts,” said one who was present. Many thought retail branches should be cut.
But as Mr. Zielke put his plan into action over the next three years, the doubters, including outgoing chief executive Martin Blessing, were proved wrong.
In that time, the bank won 800,000 new private customers. Despite low interest rates and tough competition, both yields and profits of the division have risen. In the last year, the retail banking arm earned €751 million ($825 million), a significant increase on the €500 million that had been targeted for 2016.
In pulling this off, Mr. Zielke has gained the respect of his doubters. And there's something to be said for the fact that he pays more attention to customer surveys than to expensive strategic studies, trusting the opinions of his own staff more than business advisers.
“A conceptually good idea is not the measure for how we operate our company,” he told the Handelsblatt recently.
To some degree, Mr. Zielke can thank his predecessor for the promotion. He was Martin Blessing's protégé and confidante. But most managers – even those who weren't fans of Mr. Blessing or thought that Markus Beumer, head of the bank's corporate lending business, would have made a better choice for the top job – would agree that Mr. Zielke has stepped out from Mr. Blessing's shadow.
In his rise to the top, Mr. Zielke stands for continuity.
“He'll carry out the reorganization of the bank in a more analytical and consistent fashion than Mr. Beumer could have,” one former Commerzbank banker told Handelsblatt.
“He's not loud but he doesn't accept any excuses,” said one employee. “He can also be very tough.”
In the three years before he restructured retail banking, Mr. Zielke also developed a reputation for being thorough and rigorous as a department head under then-chief financial officer Eric Strutz.
“A real stoic,” said one co-worker of his from that time. “And he often drove people mad with management meetings which went on for hours!”
But in the end he knew the bank's figures as thoroughly as any of his superiors – a quality that Commerzbank's big investors value.
He'll have his work cut out for him. There are still a number of things that need improving within Commerzbank, such as eroding margins from mid-sized business customers and rising costs. Currently the bank spends about 78 cents to earn every euro. Large investors say that must be brought down to 70 cents.
All eyes are will now be on Mr. Zielke to see if he'll be able to work his magic on the main stage.
Yasmin Osman is a financial editor with Handelsblatt's banking team in Frankfurt. To contact the author: [email protected]