Deutsche Bank appoints Indian head

Deutsche Bank is taking the groundbreaking step of naming a co-chairman born in India, Anshu Jain, after he helped the bank to avoid the worst of the global crisis. Deutsche Bank, a pillar of the German financial establishment, posted solid second-quarter results on Tuesday soon after announcing that Jain and German Juergen Fitschen would succeed Swiss Josef Ackermann as co-chairmen in May 2012. This is the first time that a non-German speaker is to run Deutsche Bank, the most important bank in Europe's biggest economy, as operations both in Asia and Germany take on greater importance. The dual-chairmanship solution announced late on Monday, with Ackermann likely to remain in the picture as head of the Deutsche Bank supervisory board, has yet to prove itself in practice. The bank reported a second-quarter net profit of 1.2 billion euros ($1.7 billion) after taking a charge of 155 million euros stemming from the Greek debt crisis. The net result was an increase of 6.2 percent from the figure for the same period in 2010 but the bank did not change its previous forecasts for the year as a whole. "Our efforts to recalibrate and rebalance our platform are paying off nicely," a statement quoted Ackermann as saying in reference to improved results at the private client and asset management units and the purchase of Postbank, which has Germany's largest retail banking network. Deutsche Bank has also acquired Luxembourg-based investment bank Sal Oppenheim, which has a strong presence in Germany. But the German bank has stressed that its future lies also in Asia, and when Fitschen joined in 1987, he worked first in Thailand, Japan and Singapore. Jain earned an undergraduate degree in India before moving to Massachusetts in the United States for graduate work and then to London where he made his mark with Deutsche Bank's core corporate and investment banking division. He is credited with steering the CIB unit safely through the 2007-09 global financial and economic crisis, and in the second quarter of 2011, it accounted for 4.9 billion euros in net revenues of the bank's total of 8.5 billion euros, marking annual increases of 4.25 percent and 19 percent, respectively. "Despite increasingly difficult market conditions, our business model has proven to be robust," Ackermann was quoted by a statement as saying on Tuesday. Deutsche Bank said that Ackermann, who is 63, would move to the supervisory board after he steps down in May 2012 and be replaced by Jain, 48 and Fitschen, 62. Deutsche Bank last had a dual leadership structure in the 1980s, and some analysts voiced scepticism over whether it would work now. "It is a model that is prone to problems," Konrad Becker, banking analyst at Merck Finck, told AFP. "It always runs the risk of there being a clash of personalities and rivalries and so on ... It depends on the personalities, how they get on," Becker added. Jain and Fitschen are expected to work along operational and relational lines, with the former handling daily business and much of the strategy and the latter spearheading contacts with German politicians and the public. Deutsche Bank is by far Germany's biggest bank, with total assets of 1.85 trillion euros at the end of the second quarter, more than two-thirds of Germany's forecast total output for this year of 2.59 trillion euros. Even the choice of German-speaking Ackermann 10 years ago raised eyebrows, and Jain is said to be working on his language skills. But he and Fitschen look set to take over a solid bank, as it posted a 17 percent gain in pre-tax income to 1.8 billion euros. Deutsche Bank's core Tier One ratio, a measure of its ability to withstand unexpected shocks, gained 1.5 percentage points to 10.2 percent, its highest level ever. The bank gave its total exposure to debt in Greece, Ireland, Italy, Portugal and Spain, the eurozone countries considered most at risk, as 3.7 billion euros on June 30.