Deutsche Bank announced co-CEO Christian Sewing would takeover as chief executive, effective immediately.
Shares of the firm rose, but the new boss will face tough questions over the bank's future.
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:
"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."