Deutsche Bank jumps after naming its new CEO


Shares of Deutsche Bank rose as much as 3.4% in early trading Monday after the firm on Sunday announced Christian Sewing will replace CEO John Cryan, effective immediately.

Sewing, previously the deputy CEO and head of retail banking, will take over at the bank as its key shareholders debate how to remedy falling revenues and defecting staff in its investment banking division.

Former CEO John Cryan:

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Deutsche Bank CEO John Cryan
Deutsche Bank CEO John Cryan during a TV interview after the bank's annual news conference in Frankfurt, Germany, February 2, 2018. REUTERS/Ralph Orlowski
Deutsche Bank CEO John Cryan during a TV interview after the bank's annual news conference in Frankfurt, Germany, February 2, 2018. REUTERS/Ralph Orlowski
Deutsche Bank CEO John Cryan during the bank's annual news conference in Frankfurt, Germany, February 2, 2018. REUTERS/Ralph Orlowski
CEO of Deutsche Bank, John Cryan speaks during the 27th European Banking Congress at the Old Opera house in Frankfurt, Germany November 17, 2017. REUTERS/Ralph Orlowski
Deutsche Bank CEO John Cryan addresses the bank's annual news conference in Frankfurt, Germany, February 2, 2018. REUTERS/Ralph Orlowski
CEO of Deutsche Bank, John Cryan attends the 27th European Banking Congress at the Old Opera house in Frankfurt, Germany November 17, 2017. REUTERS/Ralph Orlowski
Deutsche Bank CEO John Cryan attends the German Banking Congress in Berlin, Germany, April 6, 2017. REUTERS/Fabrizio Bensch
Deutsche Bank CEO John Cryan attends the German Banking Congress in Berlin, Germany, April 6, 2017. REUTERS/Fabrizio Bensch
Deutsche Bank CEO John Cryan addresses the bank's annual general meeting in Frankfurt, Germany, May 19, 2016. REUTERS/Kai Pfaffenbach
Deutsche Bank new Chief Executive John Cryan addresses a news conference in Frankfurt, Germany October 29, 2015. Deutsche Bank said it was reducing its workforce by 15,000 as Cryan seeks to improve returns at Germany's biggest bank. The lender said it would axe 9,000 full-time jobs and 6,000 external contractor positions. REUTERS/Kai Pfaffenbach
FILE: John Cryan, chief executive officer of Deutsche Bank AG, poses for a photograph during the European Banking Congress on the final day of Frankfurt Finance Week in Frankfurt, Germany, on Friday, Nov. 17, 2017. Deutsche Bank AG is considering candidates to potentially replace John Cryan amid heightened tensions between him and Supervisory Board Chairman Paul Achleitner, the Times of London reported without saying where it got the information. The bank approached Richard Gnodde, the head of Goldman Sachs Group Inc.s international operations, but hes thought to have spurned the overture, the newspaper said. Deutsche Bank also considered UniCredit SpA CEO Jean Pierre Mustier and Standard Chartered Plc CEO Bill Winters, according to the report. Our editors select the best archive images for the Deutsche story. Photographer: Alex Kraus/Bloomberg via Getty Images
John Cryan, chief executive officer of Deutsche Bank AG, speaks during a Bloomberg Television interview as the bank announces fourth quarter results in Frankfurt, Germany, on Friday, Feb. 2, 2018. Germany's largest lender just closed out another year in the red, with revenue that declined to the lowest in seven years in the fourth quarter. Photographer: Andreas Arnold/Bloomberg via Getty Images
FRANKFURT AM MAIN, GERMANY - FEBRUARY 02: John Cryan, CEO of German bank Deutsche Bank, speaks to the media over the company's 2017 preliminary financial results on February 2, 2018 in Frankfurt, Germany. Germany's largest commercial bank, suffered losses of close to half a billion Euros in 2017 and higher than analysts expected. Cryan blames the negative result on the recent tax overhaul by U.S. President Donald Trump. Deutsche Bank, which is Germany's largest commercial bank, has been struggling with losses since 2014. (Photo by Thomas Lohnes/Getty Images)
John Cryan, chief executive officer of Deutsche Bank AG, pauses during a fourth quarter results news conference in Frankfurt, Germany, on Friday, Feb. 2, 2018. Germany's largest lender just closed out another year in the red, with revenue that declined to the lowest in seven years in the fourth quarter. Photographer: Andreas Arnold/Bloomberg via Getty Images
John Cryan, chief executive officer of Deutsche Bank AG, speaks during the European Banking Congress on the final day of Frankfurt Finance Week in Frankfurt, Germany, on Friday, Nov. 17, 2017. European Central Bank President Mario Draghi, who has for years struggled to combat low inflation in the region, reiterated on Friday that a key issue keeping prices down is that wages arent rising.�Photographer: Alex Kraus/Bloomberg via Getty Images
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"The new leadership team will not accept this anymore," Sewing said in a letter published on Deutsche Bank’s website Monday. “We’ll have to take tough decisions and execute them.”

Sewing's letter sets out a goal of capping adjusted costs at 23 billion euros in 2018, something Sewing, who has been with he firm since 1989, says is "non-negotiable."

He added, "Setbacks like in the fourth quarter of 2017 are not to be repeated under any circumstances."

Deutsche Bank’s stock price has fallen 15.8% in the past year amid downgrades by sell-side analysts on both sides of the Atlantic. Only five of 34 analysts surveyed by Bloomberg have a "buy" rating for the stock, with an average target price of $15 —a 7% premium to Monday's prices. 

"Without a clear strategy commitment by all parties, turning Deutsche Bank around will be difficult," JPMorgan analyst Kian Abouhossein said in a note to clients Monday, according to Bloomberg News. 

"Our view is that the problem is not the CEO as speculated by the press, but different stakeholders with different interests, with little evidence of commitment to changing the organization in the interests of the owners:  shareholders and creditors." 

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SEE ALSO: Deutsche Bank ousts CEO Cryan — and his replacement sees 'tough decisions' ahead

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