Executive changes reveal new era for banking

Even six years on, the reverberations of the global financial crisis still crash around the world of banking.

The imminent departure of Deutsche Bank’s joint chief executives can be viewed as the result of the damage done to the bank by the crisis, and their failure to deal with the new commercial and regulatory realities set in train by the events of 2009.

That makes it the fourth non-US bank to ditch chief executives as a result of pressures unleashed by the financial crash, after similar top-level departures at Standard Chartered, Barclays and Credit Suisse. (The Americans, having undergone most of their bloodletting about the time of the crash itself, seem to have largely stuck with their C-suite executives since.)


All four banks found it hard to adapt to life in the post-crisis world. Either because of shifts in trading patterns brought about by the crisis (Standard Chartered), or because of new regulatory regimes (Barclays, Credit Suisse), or because of a lack of faith by shareholders in the new strategic vision (Deutsche Bank), their top brass felt that it was time to bring in fresh blood to reposition the banks in the new environment.

All four lenders, also, have played a big role in the Middle East and the UAE in particular. Deutsche Bank and Standard Chartered were founder members of the Dubai International Financial Centre and were at the centre of DIFC’s successful first decade, as well as being prominent in the debt and capital markets in that period.

Barclays had a major retail presence in the UAE until it felt obliged to quit that business, but its investment banking arm, Barclays Capital, remains active, as does the bank itself in corporate lending and trade finance. Credit Suisse, through its UAE base, was among those leading the charge into private banking and wealth management in the UAE and the Arabian Gulf. What the banks do next in terms of strategy, and who they chose to lead them, is of keen interest to the Arabian Gulf’s financial market. So what does the new generation of leaders at each of them tell us about global banking in the post-crisis world?

One of the lines of thinking after the crisis was that, because the blame for the debacle of 2009 was firmly on the shoulders of American and European bankers, big financial institutions that had pretensions to global status would cast their recruitment net wider than the small, western elite for future leadership.

In fact, that was one of the reasons that Anshu Jain’s elevation to joint chief executive at Deutsche Bank was welcomed. An Indian-born cosmopolitan seemed to be a radical and welcome departure from the long line of fairly conventional German leaders who have run the bank since the 1980s, when the visionary Alfred Herrhausen set Deutsche Bank off on its global quest.

So Mr Jain’s departure seems to be a retreat from globalised banking, and his replacement, John Cryan, a confirmation that Anglo-Saxons continue to rule the banking world.

This is an oversimplification, however. Mr Cryan is tagged as “British born” rather than “British” because he has spent most of his life working around the world, with an emphasis on the East (for Standard Chartered, UBS, and Singapore’s Temasek Holdings) rather than Europe or America. Fluency in German is, if anything, a further sign of non-Britishness.

Deutsche Bank has a wealth of Asian talent at senior executive level (not least in the Middle East) who should find their upwards paths eased by Mr Cryan’s appointment.

The same cannot be said for Barclays and Standard Chartered. In Antony Jenkins and Bill Winters respectively, both banks have reverted to type. This is especially disappointing at Standard Chartered, whose heritage was virtually calling out for an Asian chief, rather than a conventional American banker such as Mr Winters.

Only Credit Suisse can be truly said to have broken the mould in appointing Tidjane Thiam to succeed Brady Dougan, an American. Mr Tidjane wowed them all – colleagues, employees and investors – during his spell at the British insurer Prudential. Having an African as the head of a Swiss bank is the surest sign yet that a new global era is upon us.

fkane@thenational.ae

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