* Hugo Baenziger emerging as candidate to succeed Ackermann
* Seen as bridge builder as Deutsche set to absorb Postbank
(Adds background, details)
By Edward Taylor and Philipp Halstrick
FRANKFURT, Nov 17 (Reuters) - Deutsche Bank AG investment banking chief Anshu Jain's chances of clinching the CEO post are being undermined by a power shift within the bank that works in favour of chief risk officer Hugo Baenziger.
The 54-year-old Swiss board member is not a rainmaker like India-born rival Jain, who is seen as a front runner to succeed Josef Ackermann because the investment bank he heads makes up almost 80 percent of Deutsche Bank's profit.
But, as risk chief, Baenziger knows the inner workings of retail banking, asset management and investment banking. That makes him an obvious "bridge builder" as Deutsche prepares to absorb Deutsche Postbank AG, adding retail banking as the group's second pillar, alongside investment banking.
Germany's flagship lender faces months of implementing new bank rules in an investment banking environment where risk-taking is increasingly difficult, causing some senior figures to question whether Jain is the natural choice for CEO.
Deutsche Bank declined comment.
Baenziger, who uses tactics learned as an officer in the Swiss Army for crisis management, played a key role in shepherding Deutsche through the crisis without a bailout.
The issue of succession won't be formally decided until closer to 2013, when Ackermann officially retires. Neither Ackermann or the supervisory board have publicly expressed a preference. But the selection process is already in train and Deutsche may choose to appoint a new CEO shortly after it completes a management plan which targets 10 billion euros in pretax profit in 2011.
BEST SUITED
Senior Deutsche Bank executives and members of the supervisory board -- which will select the next CEO -- signal it's not a foregone conclusion that Jain will get the job.
"The captain of the ship needs to give a direction and detect icebergs, but he doesn't have to row the boat," a member of the supervisory board said.
Not picking an investment banker would run counter to a trend at other European banks involved in investment banking.
Britain's Barclays recently handed investment banking chief Bob Diamond the top job after initially passing him over in favour of John Varley.
And Credit Suisse promoted U.S. investment banking chief Brady Dougan, rather than Swiss wealth management chief Walter Berchtold, to run the Swiss bank. UBS AG, which had a wealth management expert at the helm during the financial crisis, hired banker Oswald Gruebel.
Before joining Deutsche Bank, Josef Ackermann himself walked out of SKA, a predecessor of Credit Suisse where he was a board member, after being passed over for the top job. He later became investment banking head at Deutsche before becoming CEO in 2002.
COMPETING FACTIONS
But senior bankers say one of Ackermann's most important achievements was to be "neutral," a quality needed to unite competing factions within the bank. That may count against Jain's candidacy given his investment banking background.
Unlike Jain, Baenziger speaks fluent German, a fact that will go down well in Berlin and in German banking circles.
Ackermann played a key role in coordinating rescue talks for IKB and Hypo Real Estate and has used his academic background to influence regulatory developments in banking through his role as chairman of the Institute of International Finance.
Baenziger's regulatory background -- he worked as assistant to the president of the Swiss Federal Banking commission -- puts him in good stead to tackle a wave of new rules.
Like Ackermann, he is an enthusiastic supporter of army training. He worked with the Swiss Armed Forces College in Lucerne to set up a crisis management course and has given lectures on applying military tactics to business.
But Jain, a keen wildlife photographer, remains a strong contender. The investment bank continues to be the cash cow for Deutsche Bank and he tightened his grip on the business with a management revamp this summer.
Jain's connections in Asia, where Deutsche recently acted as bookrunner for three initial public offerings (IPOs) in China, are seen as being key to future growth. And thanks to his client-facing job, Jain maintains key ties to customers.
Cricket-fan Jain has recently taken a more high-profile role as mediator between business and politics, leading Deutsche Bank's mandate advising the UK Treasury on achieving financial stability during the crisis.
In July, he was among a group of businessmen to accompany UK Prime Minister David Cameron to India on a networking tour to promote trade links between Europe and India.
Earlier this week, he made a push to raise his profile in Germany when he made his first solo public appearance as a board member by giving a keynote speech at a banking conference.
The 47-year-old acknowledged his industry's role in causing the financial crisis and emphasised his enthusiasm for the Postbank acquisition.
Although Ackermann does not vote in selecting the next CEO, he is working with supervisory board chairman Clemens Boersig to identify the qualities his successor needs. (Editing by David Holmes and Alexander Smith) ($1=.7409 Euro)