April 28 (Bloomberg) -- Josef Ackermann, who helped Deutsche Bank AG navigate the financial crisis, will have his contract as chief executive officer extended by three years.
Ackermann, 61, acceding to a supervisory board request, will remain CEO until the annual general meeting in 2013, Frankfurt-based Deutsche Bank said in a statement late yesterday. He was scheduled to step down in May of next year.
The Swiss-born CEO, who has been at the helm since 2002, helped Deutsche Bank skirt the worst of the U.S. subprime mortgage market crash and resist taking government aid. The German bank returned to profit in the first quarter, analyst estimates show, bouncing back from the first annual loss in more than 50 years in 2008.
“This is about continuity,” said Manfred Jakob, a Frankfurt-based analyst at SEB AG. “Ackermann has best exemplified the company’s strategy of both pursuing investment banking and expanding retail banking. Overall, it’s not a bad move.”
Deutsche Bank, which reports first-quarter earnings today, may post net income of 773 million euros ($1.02 billion), compared with a loss of 131 million euros a year earlier, according to the median estimate of 13 analysts surveyed by Bloomberg.
Ackermann “steered the bank safely through the crisis,” said supervisory board Chairman Clemens Boersig in the statement. “Our performance in the first quarter 2009 is impressive evidence of this.”
‘Secures’ Leadership
Deutsche Bank rose 55 percent so far this year in Frankfurt trading. The stock is the third-biggest gainer in the Bloomberg index of 65 European banks, following a 69 percent slump last year. The company has a market value of 26.9 billion euros.
Ackermann said on Feb. 5 at the annual earnings press conference in Frankfurt that he was sticking to his plan to step down in May 2010, when asked by Bloomberg News whether he’d consider extending his contract.
Deutsche Bank appointed four executives to its management board in March, stoking speculation one of them would be selected to succeed Ackermann. Investment banking co-heads Anshu Jain and Michael Cohrs were named to the board, as was Rainer Neske, the head of private and business clients, and regional management chief Juergen Fitschen.
The decision to extend the contract “secures leadership continuity for the bank,” Boersig said in the statement.
Higher Profit
Since taking over, Ackermann boosted Deutsche Bank’s profit 16-fold by 2007 by cutting more than a quarter of the workforce, selling industrial stakes in companies such as Daimler AG and expanding the investment bank. Ackermann, who joined from Credit Suisse in 1996 and headed the investment bank before becoming CEO, expanded the securities unit and the bank’s international operations.
Nearly two-thirds of the 80,000 employees work outside Germany. The bank extended its geographical reach to markets including Qatar and Peru, and generated almost three-quarters of its revenue abroad by 2007 compared with about half in 2001.
Ackermann also helped turn Deutsche Bank into a sales-and- trading powerhouse. The German bank ranked No. 2 among underwriters of international debt issues last year, and was among the top 10 underwriters for equity and equity-linked securities, according to data compiled by Bloomberg. It ranked seventh in providing merger advice.
Ackermann has been investing in consumer banking to reduce reliance on investment banking, which generated about half of earnings in 2007. Deutsche Bank earlier this year acquired a stake in retail lender Deutsche Postbank AG and has an option to gain control in the future.
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