November 27, 2021

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In the last two years, half of Europe’s banks have changed CEOs

In the last two years, half of Europe's banks have changed CEOs

Barclays Plc announced C.S. Venkatakrishnan was the replacement to Jes Staley, who abruptly stepped down on Monday, becoming the tenth large lender to do so since late 2019. Other companies with CEOs who have left under a cloud include UniCredit SpA, Danske Bank A/S, and Commerzbank AG.

Half of the CEOs of Europe’s top 20 publicly traded banks have been in their positions for less than two years. According to calculations based on business filings, the remaining ten bank CEOs have been in their roles for an average of more than six and a half years.

European banks are still dealing with poor governance and low earnings more than a decade after the financial crisis exposed defective business models and significant cultural flaws. CEOs are being held to greater standards by authorities and investors, making the role riskier.

Dieter Hein, a Frankfurt-based banking analyst at Fairesearch/Alpha value stated “the era of bank CEOs sitting in their seats for a decade or longer is coming to an end”. “The pressure on CEOs has increased. They must serve as role models, and they are in a position similar to politicians.”

Here’s a rundown of some of the European bank leadership changes during the previous two years: Staley is resigning from Barclays immediately, citing a U.K. regulatory investigation into how he handled past ties to sex offender Jeffrey Epstein. Danske Bank dismissed its CEO in April, less than two years after he was involved in a Dutch money-laundering inquiry. Andrea Orcel will take her position. In April, Andrea Orcel took over as UniCredit’s CEO after Jean Pierre Mustier fell out with his board over strategy, notably his aversion to domestic takeovers.

In January, Manfred Knof took over as CEO of Commerzbank after his predecessor’s several strategic reboots failed to put the German lender on a path to adequate profitability. In March 2020, HSBC Holdings Plc named temporary CEO Noel Quinn as its permanent chief after failing to find an external candidate following the departure of predecessor John Flint due to concerns about his suitability for the job.

Tidjane Thiam, the CEO of Credit Suisse Group AG, resigned in February last year after the company was shaken by eavesdropping allegations. His replacement, Thomas Gottstein, has had a difficult year as a result of failed acquisitions that exposed flaws in the company’s risk-taking culture.

Some leadership transitions have gone more smoothly. UBS Group AG nominated Ralph Hamers to succeed Sergio Ermotti, one of Europe’s longest-serving bank CEOs, in November. Instead of tearing up its plan, the Swiss lender saw the move as an opportunity to grow on it.

Despite this, Hamers, who ran ING Groep NV for almost seven years, was questioned about his role in the Dutch lender’s previous anti-money laundering violations. ING discovered an heir within its own ranks.

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