NEW YORK — By now Anshu Jain, the Indian-born British head of Deutsche Bank’s investment bank in London, must have the hang of saying “Doppelspitze.”
Jain, who is expected to be crowned head of Germany’s prime lender Thursday, is now learning the German meaning of “co-chief.”
Jain, 49, has been a superstar manager at Deutsche Bank, in some years contributing two-thirds to the bank’s total profits. Along the way he also picked up the unlikely nickname: the George Clooney of banking.
Yet Jain doesn’t speak German and seems to lack the necessary political and industrial contacts inside Germany. As a result, he will have to share the top job with the bank’s 63-year-old domestic head Juergen Fitschen.
Deutsche Bank explains the double-act by pointing to a long tradition of co-CEOs at the bank. It has also signaled that the younger banker, who has been at the bank for 17 years, is likely to take sole charge in time.
Not everyone is happy with the move.
“It’s not an ideal solution,” said Dirk Becker, a banking analyst with Kepler Capital Markets in Frankfurt. “But it’s important for Deutsche to fill the role of an Ambassador in Berlin. Otherwise the bank will lose power.”
The timing of the shift — coming in the midst of another perilous moment for the euro and monetary union — makes the decision even more important.
Deutsche Bank’s top executives have had close ties with German political leaders through the years.
Hermann Josef Abs, who ran the bank after World War II, negotiated a debt agreement with international creditors on behalf of Germany.
Alfred Herrhausen, who was assassinated in 1989 by the Red Army Fraction terror organization, was a close advisor to former chancellor Helmut Kohl.
Meanwhile, Josef Ackermann, the man in the top job at Deutsche for the last ten years, has had Angela Merkel’s ear.
As a result of this long and storied history, Jain’s appointment is a landmark for Deutsche Bank and for Germany.
While Jain’s predecessor Ackermann was a Swiss national, his native language is German. And among the 30 blue chip companies in Germany’s DAX stock index, only a handful have promoted non-German speakers to the top — including global giants Bayer and software maker SAP.
In handing Jain one of the most important and powerful jobs in the German economy, Deutsche Bank has made an appointment that is — to many Germans, at least — controversial, not least due to his former position at the company.
“He is another global, soulless investment banker,” said Max Otte, a fund manager. “This trend is the wrong direction for Germany.”
“German deposits should not end up in a casino,” protested a parliamentarian from Merkel’s CDU party upon hearing that a London investment banker was taking over the helm.
But like it or not, Jain’s appointment reflects the reality of the nation’s biggest bank, whose ambitions and business interests lie far outside of Germany.
Over the past decade, Deutsche has grown into Europe’s largest bank with a 2.2 trillion euro balance sheet. That’s more than 65 percent of Germany’s GDP.
In 2002, the corporate and investment bank divisions accounted for only 21 percent of the bank’s pre-tax profits; by 2010 this slice had expanded to 70 percent. As a result, the majority of Deutsche Bank’s profits are today made outside of Germany.
Jain seemed to be placating domestic critics when he recently told CNBC that Deutsche Bank will focus on expansion in its home market.
In addition, Jain said that in the years before the financial crisis investors “didn’t really look at nationality. At this point, I would say country of origin (for banks) is more important than before.”
It took the supervisory board of the bank more than two years to arrive at the co-chief solution. This protracted search appears to reflect acute German fears about losing its roots in a globalized business world.
“The pain threshold was crossed,“ explained Hans-Christoph Hirt, Global Head of Corporate Governance at Hermes, a UK fund manager. “The succession planning process for the CEO was flawed and has been damaging to the bank’s reputation,” he added. “What bothered me was that suddenly Jain’s German fluency became a criterion. In the end it’s paramount to find the best candidate for the job.”
Or Doppelspitze, if you prefer.