Deutsche Bank’s CEO Christian Sewing likely to surrender his role overseeing the lender’s investment bank

Germany’s largest lender posted its first annual profit in six years in 2020

Deutsche Bank's chief executive Christian Sewing is looking to focus more on growth after two years of deep cost cuts. Reuters

Deutsche Bank chief executive Christian Sewing is set to relinquish his role overseeing the lender’s sprawling investment bank, with Fabrizio Campelli seen as the lead candidate to replace him.

Germany’s largest lender will likely decide on a successor over the next couple of months, said people familiar with the plans. While chief transformation officer Mr Campelli is most likely to succeed Mr Sewing, US head Christiana Riley and Asia head Alexander von zur Muehlen are also potential candidates, the people said.

Mr Sewing took on the dual role of chief executive and investment banking head as part of his decision in 2019 to pull out of equities trading and slash the division’s headcount.

The decision was seen with doubt by the bank’s regulators, who told Mr Sewing soon after they’d prefer him to give up the role out of concern it overburdens him. While the bank returned to profit last year as it benefited from a broad trading rally, the regulators’ view hasn’t changed, the people said.

A Deutsche Bank spokesman declined to comment.

For Mr Sewing, handing over the investment bank would come at an opportune time. Revenue at the unit jumped by almost a third last year as clients sought to navigate the volatility cause by the Covid-19 pandemic. Both fixed-income trading, led by Ram Nayak, and underwriting of debt issues and equity capital raises, led by Mark Fedorcik, soared amid buoyant global capital markets.

That sets a high bar for the new head of the investment bank. While Deutsche Bank has said the unit is off to a strong start this year, it expects investment banking revenue to decline from the unusually high volumes last year. The lender has vowed to hold on to market share gains made in the second half of last year.

Mr Campelli last week gave an upbeat outlook for the investment bank at a conference, sending shares of the lender higher.

A British and Italian citizen, he has been with Deutsche Bank since 2004 and first worked in the investment bank for about five years before moving on to run the lender’s strategy division and then its wealth management.

Mr Sewing took over the investment bank from Garth Ritchie, a Deutsche Bank veteran who had overseen the business for years until he left in the 2019 restructuring. The bank was also considering hiring an outside executive for the job at the time, Bloomberg News has reported.

Since then, the investment bank has become an increasingly important part in Mr Sewing’s turnaround strategy. A former corporate banker, the chief executive had initially planned more aggressive cuts to trading but soon pinned his hopes on the business when it became clear that negative interest rates would weigh on the bank’s other operations for longer.

Mr Sewing has said he wants to focus on investments this year to drive revenue growth.

The investment bank was previously the division suffering the deepest headcount reductions among the lender’s core units but the lender is now re-hiring in some areas such as Asian Equity Capital Markets.