Talk about loyalty paying off. The new head of Deutsche has been in the banking business for 29 years, and all but two of those years were spent working for the institution he will now run.
Mr. Sewing’s rise to replace John Cryan, the beleaguered CEO who was fired on Sunday, has not exactly been meteoric. But it has been steady and meritorious. “Not everyone here is a Sewing fan,” says one source at the bank. “But he has great respect because he knows what he’s talking about.”
Mr. Sewing first joined Deutsche Bank as a 19-year-old trainee in Bielefeld. “My father thought it was very important that I do an apprenticeship of some sort first, regardless of what I decided to study afterwards,” the former co-deputy chief executive, who heads Deutsche’s private and commercial banking operations, once told Handelsblatt.
Mr. Sewing – the surname is pronounced "zay-ving" – went on to study banking in Hamburg and Bielefeld, before coming back to Deutsche Bank. Indeed, his career at Deutsche was only interrupted by two years at DG Hyp, a German mortgage bank, in the mid-2000s.
We can't rest on our laurels in any area. CEO Christian Sewing, in a Monday letter to Deutsche Bank staff
The 47-year-old spent 10 years overseas for the bank, in Canada, Asia and England and, in 2015, he became the youngest member on the board as well as its longest-serving staffer. And for the past year or so, he and his co-deputy CEO, Marcus Schenck, appear to have been being groomed for bigger things by the supervisory board chairman, Paul Achleitner. The pair were made co-deputy heads of the bank in March last year.
While Mr. Schenck was tasked with improving Deutsche’s investment banking, Mr. Sewing was to integrate Postbank’s private banking business.
In general, observers suggest that Mr. Schenck looked like the more ambitious and promising candidate. However, in a letter to Mr. Achleitner at Easter, Mr. Schenck said he did not wish to renew his five-year contract and will now leave the bank after the annual general meeting in May. Mr. Schenck had previously expressed dissatisfaction with the direction Deutsche’s investment banking sector was moving in, condemning the bank’s failure to put enough money into it.
It’s unclear if Mr. Schenck was also in the running for the top job at Deutsche. But if he was, then Mr. Sewing apparently had another advantage: It seems he has the trust of big investors like the Chinese-owned HNA Group. Shareholders, however, were more critical of Mr. Schenck, a former Goldman Sachs banker who had undertaken costly expansions at E.ON, the energy company, while heading the finance department there.
“This is not a bad decision,” noted one senior investor. “Sewing is 100 percent loyal and wants to do what is right for the bank.”
“Sewing is a sensible option because he’s known the bank for so long,” another investor added.
Insiders say that despite the fact that Mr. Achleitner possibly looked outside the bank for other candidates, Mr. Sewing has been at the top of the list for a while.
Mr. Sewing will be the first non-investment specialist from the less glamorous private-banking side of the business to lead Deutsche. The manager has also worked in risk management and wealth management for Deutsche, but some analysts still say this could indicate a change in strategy for the banking behemoth.
In fact, German publication Spiegel Online has described Mr. Sewing – a passionate tennis player and Bayern Munich football fan, who once wanted to be a sports journalist – as the “perfect son-in-law” rather than one of the temperamental, egotistic “sun kings” who headed Deutsche Bank in the recent past.
Mr. Sewing also earns praise from the staff. He is known for his prowess for networking and his discipline, says one Deutsche Bank employee representative, noting that, Mr. Sewing “works hard and makes progress.” The manager, a father-of-four who lives in Frankfurt during the week then commutes to his family home in Osnabrück at weekends, is known for being down-to-earth, making firm decisions and seeing them through. Those are exactly the qualities that Mr. Cryan was seen to be missing, according to the board, who felt that he was unable to facilitate the necessary changes quickly enough.
Mr. Sewing is also seen as having handled the restructuring of Deutsche’s retail operations well, closing almost 200 branches and cutting thousands of jobs without alienating labor representatives. He oversaw the decision to avoid selling off the Postbank subsidiary, choosing instead to incorporate Germany’s former post-office bank into Deutsche’s wider retail network – something that will ultimately give Deutsche a unified domestic retail base of over 20 million customers.
But can the perfect son-in-law and intern-made-good succeed where others have failed? The new appointment lands Mr. Sewing in one of the toughest jobs in international banking, with the unenviable task of trying to restore Germany’s largest financial institution to health after years of falling revenue and lackluster performance.
He has managed to make substantial cuts in retail banking, but it remains to be seen whether he wants to push through further cost-cuts at Deutsche’s troubled investment banking arm, which has seen revenue tumble in recent years.
In a Monday morning letter to staff, Mr. Sewing appeared to address that question. “Looking at our returns, we need to bring back that hunting mindset, to do better in every division of the business and to raise the yardstick,” the new Deutsche boss wrote to his colleagues. “We can't rest on our laurels in any area.”
The year had started off on a solid footing, Mr. Sewing said, but added that “solid” was not good enough. There could be no repeat of past losses and “hard decisions” would need to be made, after a closer look at ailing units.
Yasmin Osman and Daniel Schäfer in Frankfurt reported this story for Handelsblatt. Cathrin Schaer adapted this story for Handelsblatt Global. To contact the authors: [email protected], [email protected]