By Jenny Strasburg
It was mid-2016, and Deutsche Bank AG was having a terrible
summer. The stock was down to several-decade lows, analysts were
braying for a capital hike and the Justice Department was
threatening a massive fine.
Meantime, German utility RWE AG was working on a $5 billion
spinoff of a subsidiary in what would be Europe's biggest equity
offering of the year. RWE wanted a particular Deutsche Bank banker
on the deal, one who'd worked at another German utility: Marcus
Schenck, the Deutsche Bank chief financial officer.
Despite the turmoil at the office, Mr. Schenck shepherded the
RWE deal and others, telling clients to think of him as their
senior point of contact, people close to the process said. Some
people inside and outside the bank raised eyebrows that the
51-year-old CFO was spending so much time away from the books.
But a penchant for deal-making has landed Mr. Schenck the
promotion of his life: This month, he was named deputy CEO
alongside another German, Christian Sewing, a 46-year old who
oversees retail and private banking and has been at Deutsche Bank
since he was a teenage trainee.
Messrs. Schenck and Sewing are widely seen as potential
successors to Chief Executive John Cryan, who is 56.
Of the two deputies, Mr. Schenck has the more global and
higher-profile stage. As soon as a new CFO is named -- likely in
the next month or two, people close to the bank say -- he'll move
over to the investment bank, which despite market-share declines
remains a global force.
There, Mr. Schenck will replace Jeffrey Urwin, who is retiring
after less than two years on the job. Mr. Schenck is taking on an
expanded role, as Deutsche Bank reunites its far-flung trading
business with its corporate and investment banking business, which
it had split off in late 2015.
The recombined investment bank will be the biggest by far of
Deutsche Bank's three business divisions, measured by revenue and
risk-bearing assets. Mr. Schenck will co-head the recombined
investment bank with markets chief Garth Ritchie; of the two, only
Mr. Schenck has the deputy CEO title.
People who know Mr. Schenck say they think he is taking on his
toughest job yet. He needs to honor promises he has made as CFO to
continue hacking away at costs yet make the investment bank's
business grow. Financial turmoil and paltry bonuses have cost
Deutsche Bank a number of senior bankers as well as market share,
including in Germany, where it wants to regain ground.
Mr. Schenck met with investors around Europe this month,
according to a person familiar with the matter. Shareholders
hammered him with questions about cost-cutting targets. Many said
they'd been burned before by Deutsche Bank's failure to
deliver.
He told them the management team has two years to prove this
time is different. He plans to hire more bankers to improve
coverage of sectors where departures have hurt the bank, such as
chemicals and health care, according to a person familiar with his
thinking.
He, like other executives, wants Deutsche Bank to regain the
trust of corporate clients, especially in Germany, and to become
less reliant on volatile trading by clients like hedge funds.
Mr. Schenck was born in Bavaria, an only child whose father was
a German Air Force pilot who flew F-104 Starfighters and whose
mother was a sometime shopkeeper. As a child, he moved around
Germany with his parents and played soccer, as his own school-age
children do now. Mr. Schenck tries to leave Deutsche Bank's
headquarters in Frankfurt, or wherever else he is working, and
arrive home to Düsseldorf Friday nights to spend weekends with his
family.
He met his Dutch wife, Saskia, when he was a young banker at
Goldman Sachs International Inc. and she worked at DaimlerChrysler
AG, a client.
During his first stint at Goldman Sachs, from 1997 to 2006, he
was a classic German merger-and-acquisitions banker, helping to
advise Britain's Vodafone AirTouch PLC on its $180 billion takeover
of Germany's Mannesmann AG. He became known for kicking off his
shoes and pacing in his socks during late-night deal sessions at
the office.
Named a Goldman partner in 2002 at age 36, Mr. Schenck two years
later became investment-bank co-head for Germany and Austria. He
left Goldman in 2006 to be CFO at E.ON AG, a client, overseeing
asset sales and expansion plans. In 2013, he returned to Goldman as
a London-based senior banker.
"Marcus has CEO potential," said Alex Dibelius, who ran Goldman
Sachs's German operations for years and now is managing partner at
buyout firm CVC Capital Partners.
Another Goldman Sachs alumnus, Deutsche Bank Chairman Paul
Achleitner, recruited Mr. Schenck in 2014 to Deutsche Bank,
convincing him it was worth a pay cut, according to people familiar
with the matter. He was named CFO effective May 2015. The next
month, Anshu Jain resigned as co-CEO , and Mr. Cryan took over. The
restructuring has continued since, with occasional bouts of deep
investor concern over Deutsche Bank's capital position.
At one point early last year, Mr. Achleitner asked Mr. Schenck
if he would consider taking over the investment bank, according to
people familiar with the matter. At the time, officials weren't
sure Mr. Urwin, based in New York, was going to work out in the
role, the people said. Deutsche Bank declined to comment on Mr.
Urwin's behalf beyond an earlier statement that he plans to
retire.
Mr. Schenck didn't think Mr. Urwin's job was better than being
CFO, at least not the way it was structured, a person familiar with
his thinking said.
Late last year, the management-change talks resurfaced,
according to people familiar with discussions at the time. On Feb.
7, The Wall Street Journal reported that Mr. Schenck was in talks
to take over Mr. Urwin's job and that Mr. Urwin was discussing
retirement.
Among Mr. Schenck's tasks will be to rebuild morale at the
investment bank, at headquarters and in the big New York and London
operations.
In February, Mr. Schenck called bankers in New York, some of
whom hadn't known of the changes, and told them he plans to be in
the U.S. monthly, addressing some concerns about long-distance
management, one of the people said.
(END) Dow Jones Newswires
March 22, 2017 14:01 ET (18:01 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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