FRANKFURT (REUTERS) – The European Central Bank (ECB) has asked Deutsche Bank a number of times in recent months to name a successor to chairman Paul Achleitner as the end of his term nears, two people with knowledge of the matter said.
Mr Achleitner is due to retire next May after 10 difficult years in office that saw two changes of CEO, billions of euros of losses and huge fines.
The 64-year-old has survived three shareholder votes on whether to oust him but said he will go next year.
With less than a year to go, the bank’s supervisor, the ECB, is still waiting for Deutsche to identify a successor and has ratcheted up pressure on Germany’s biggest bank and its chairman in recent months, the people said.
Deutsche has recently returned to profit but remains under the close watch of regulators who guard the health of the global financial system, of which the bank, as one of the world’s biggest lenders, is a critical part.
In particular, they have been concerned by lapses in Deutsche’s money laundering controls – a problem that extends back throughout Mr Achleitner’s tenure.
In a major setback for Deutsche, Germany’s financial watchdog BaFin in April ordered it to enact further money laundering safeguards and extended a mandate for a special monitor to keep track of progress.
The ECB is making the repeated demands because it wants Mr Achleitner to leave in an orderly fashion, with the central bank having enough time to vet the candidate to replace him, the people said.
Three people familiar with the bank’s search for a successor said there was a shortlist of three German men, with one adding that Deutsche would be ready to announce a successor by February or March next year. Such a late date would leave little room for manoeuvre if the candidate were to fall through.
The three said that German stock exchange chief Theodor Weimer was the preferred candidate.
Mr Weimer, however, has publicly dismissed the idea saying earlier this year that his taking the post was “not at all a topic of discussion”. A spokesperson for Weimer declined to comment further.
Regulators have struggled for years to rein in Deutsche Bank following numerous scandals and governance issues.
The US Department of Justice has investigated the lender’s role in the 200 billion euro (S$322 billion) Danske Bank money laundering scandal, people familiar with the inquiry have told Reuters.
Deutsche has also had to pay nearly US$700 million (S$926.5 million) in fines by US and British regulators in a separate money laundering case involving US$10 billion in so-called mirror trades from Russia.
The bank has said it has significantly improved controls in recent years.
Earlier this year, the ECB clashed with CEO Christian Sewing, demanding he relinquish day-to-day oversight of Deutsche’s sprawling investment bank, fearing he had too much on his plate.
Mr Sewing, who eventually complied, for his part has sharply criticised the ECB’s ultra-loose monetary policy that has required lenders to pay to deposit money with the central bank and eroded profits.
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