FRANKFURT, June 8 (Reuters) - The appointment of John Cryan as chief executive of Deutsche Bank sent shares in Germany's largest lender up 8 percent on Monday as investors judged the Briton a more credible contender than his two ousted predecessors to revive its fortunes.
Cryan faces one of the most difficult jobs in global finance as he aims to move Deutsche Bank beyond the raft of regulatory and legal probes that have bedevilled the bank under its current management and execute a strategic overhaul.
Cryan takes over from Anshu Jain and Juergen Fitschen, Deutsche's co-chief executives, who announced their resignations on Sunday, just over a month after unveiling a cost-cutting drive designed to arrest the bank's sub-par performance.
Investor scepticism with the turnaround plan due to a lack of detail and a poor record on meeting targets together with staff disquiet at the prospect of thousands of job cuts heaped pressure on the duo.
At the bank's annual shareholder meeting two weeks ago, 39 percent of the capital represented voted against the management board and some investors called for Jain and Fitschen to go.
Deutsche Bank has pledged to give more detail on its strategic revamp at the end of next month and some investors were hopeful that Cryan, who helped steer Swiss bank UBS through the financial crisis, would be able to take more radical action than Jain, a former investment banker who wanted Deutsche Bank to be Europe's answer to Goldman Sachs.
"We believe Mr Cryan will be able to review the size and scale of the investment bank with a much harsher lens than Mr Jain," said Stuart Graham, analyst at Autonomous.
"The execution risk is higher than normal at Deutsche, but so too is the investor unhappiness. We therefore expect the shares to out-perform, at least for the next few months, on the back of this cathartic management change."
Europe's banking elite has been roiled by the financial crisis and its aftermath as new regulations and a slew of scandals eat into profits.
Standard Chartered and Credit Suisse both have new chief executives taking over this summer but of those trio, Cryan faces the most formidable challenge.
After sticking with an expensive universal banking model during the crisis, Deutsche Bank is now playing catch-up with rivals in axing unprofitable business lines to boost earnings and shore up its balance sheet.
The restructuring plan unveiled in April is meant to boost cost savings by an annual 3.5 billion euros by 2020 and drive a return on tangible equity, a key measure of profitability, of at least 10 percent in the same period.
But the strategy was the less radical of two options considered by Deutsche's board and investors viewed it as unambitious. Previously, the bank had targeted a return on equity of 12 percent for 2015.
Jain will step down at the end of this month while Fitschen will leave after Deutsche Bank's annual shareholder meeting in May meaning Cryan, a former chief financial officer at UBS, will be the sole CEO. (Writing by Carmel Crimmins)