The New Face of Deutsche Bank Anshu Jain Mixes Success and Controversy
Anshu Jain, the future CEO of Deutsche Bank, represents both the bank's greatest successes and its biggest excesses. In the United States, the German institution is viewed as one of the main culprits behind the financial crisis -- one of the reasons the Indian-born financier must first prove to many at the bank that he is the right choice.
Anshu Jain and his cousin Amit waited three days for a tiger in an Indian national park. Investment banker Jain had traveled all the way from New York to see the animal, but it never made an appearance.
Disappointed, the two men and their wives got back into their car, a rickety Ambassador, and drove out of the park. Suddenly one of the imposing predators crossed the road. The two men grabbed their video cameras and climbed onto the roof of the car.
Anshu Jain was so enthusiastic that he jumped down from the car. He has raved over Jim Corbett, the famed British conservationist who died in 1955, since childhood. He was so excited that he ran after the tiger, still holding his video camera up to one eye. His wife Geetika panicked.
Cousin Amit decided to climb down from the roof, as well. With a loud bang, the roof of the Ambassador snapped back into its original shape, and the tiger bounded away.
Amit Jain has to laugh when he tells this story, which transpired two decades ago, as he sits in his office on the 20th floor of a futuristic glass office building in Delhi. Like many Jains, he has carved out a career for himself and now heads the Indian branch of the Dutch chemical company Akzo Nobel.
His older cousin Anshu has been even more successful. He is expected to become the CEO of Germany's Deutsche Bank in May 2012. Jain and German economist Jürgen Fitschen will take over as co-CEOs, replacing Deutsche Bank's current CEO Josef Ackermann.
Responsible for the Bank's Most Profitable and Controversial Unit
When that happens, the man who loves tigers will become one of Germany's most powerful men. As the head of its investment banking division, he has already been responsible for Deutsche Bank's most profitable -- and controversial -- businesses, which led the world into a financial crisis and to the brink of ruin.
Friends and relatives describe Jain as a nature-loving and unassuming man, grounded and modest, but also as a highly intelligent, cool-headed analyst. His opponents see him as the epitome of the Anglo-American brand of financial capitalism, for which yields are everything.
Deutsche Bank doesn't just represent Germany because of its name. Whether they wanted to or not, the largest German bank and its top executives have always been held responsible for more than just the latest quarterly earnings. Deutsche Bank has always been more than just a bank, in good times and bad, while its senior executives were consistently seen as more than bankers.
One of Jain's predecessors, Hermann Josef Abs, negotiated a debt agreement with international creditors on behalf of Germany in 1953. Former Deutsche Bank Chairman Alfred Herrhausen was assassinated in 1989, presumably by the German Red Army Faction (RAF) terrorist organization. Herrhausen was one of the symbolic figures of what was then West Germany, a political thinker whose influence extended far beyond the banking world.
Ackermann also has close ties to politics. He advises German Chancellor Angela Merkel and is involved in the preparations for the G-20 summit of the world's most important nations, a role that is taken for granted. But his relationship with the German government is not entirely unclouded, and Ackermann, a Swiss national, was long unpopular with the German public.
And now there is Jain, an Indian from Delhi, who lives in London and becomes visibly irritated when asked about his German language skills. Nevertheless, he has been secretly learning German since last year, as part of his painstaking preparations for his new job.
In fact, Deutsche Bank has two faces: It is indispensable for Germany, and yet it also outgrew the country long ago. English has been its official language of doing business for more than ten years, and its employees come from 120 countries.
Jain's appointment reflects the reality of an institution that, as a result of massive investments, has become one of the world's largest investment banks. In good years, Jain and his team of fixed traders from all over the world have been responsible for two-thirds of the bank's total profits.
But there have also been bad years. In 2008, Jain's division lost more than 7 billion ($9.6 billion). At the time, it was the stable, seemingly dull bread-and-butter deals with small and mid-sized German companies, and with private customers, that stabilized the bank. Deutsche Bank has this part of its business to thank for allowing it to remain liquid without direct government aid.
But Deutsche Bank profited indirectly from the government support nonetheless. The bank escaped billions in losses when German mortgage lender HRE and American insurance giant AIG were bailed out. If that hadn't happened, the entire financial system could very well have collapsed.
But compared with most of its competitors, Deutsche Bank is still in relatively good shape today, in the midst of the global financial crisis. In recent weeks, its strong roots in Germany have helped to ensure that the institution, unlike many competitors from Italy and Greece, would not have to end each day wondering whether it would still have enough money the next morning.