This is an interesting article on the crisis surrounding Germany's biggest bank, the Deutsche Bank. For the past three years, the bank has posted losses of 500 million Euros, 1.4 Billion Euros, and 6.8 billion euros. Since the financial crisis of 2008, the bank hasn't been able to recover in terms of the losses it incurred due to the recession. During John Cryan's tenure as CEO, the company lost two-thirds of its stock value and investors have been pessimistic about his management and policies. The supervisory board involved in his firing believed that a new executive branch is what's most needed to implement the framework laid down by ousting CEO. The board has approved the promotion of a long-term employee who has been with the company for almost three decades. With the new CEO taking charge the stocks have already risen 3 percent and investors have signaled their optimism in this decision. It would be interesting to observe what the future holds for the bank given the change in its executive management.
http://money.cnn.com/2018/04/08/news/companies/deutsche-bank-new-ceo-cryan-sewing/index.html
3 comments:
This article shows how the financial crisis has affected the whole world and not just the US. Even now 10 years after, there are still some firms that are still dealing with the problems. But this article really takes me by surprise, for someone that does not really follow news in Germany in special, it comes as a big surprise seeing that the biggest bank in Germany is in trouble and has been incurring in losses in the last years. Usually, Germany is seen as the country with the strongest economy in Europe. Which is why realizing that the biggest bank there is in trouble, shows that even in a strong economy there are firms in trouble, and maybe even the strongest economy is not as strong as everyone believes.
It seems that the bank not only needs to bring back the profitability but also its reputation since controversies arose for several years.
I agree with the board that the company needed to hire a new CEO because Deutsche Bank needed a new identity in order to change the direction the company was headed. I am kind of surprised that they didn't hire a CEO that was from outside the organization because, normally, when a company is doing progressively worse over a long period of time, they not only need different strategies, but they need a new culture.
Post a Comment