Germany's Deutsche Bank AG (DB, DBK.XE) said Monday that Chief Executive Josef Ackermann won't take over as chairman of the supervisory board when he steps down in May and proposed Allianz SE (ALV.XE) financial chief Paul Achleitner for the position instead.

Citing "extremely challenging" conditions on the international financial markets and in the political-regulatory environment," Ackermann said he must focus on his tasks as CEO right now, according to a statement from the bank. This means he can't spend time seeking the support of shareholders for his bid to be supervisory board chairman.

Supervisory board candidates need the support of 25% of the shareholders to be elected.

A person familiar with the matter told Dow Jones Newswires that Ackermann didn't have the time do the necessary lobbying and couldn't win their backing. Another person familiar with the matter said: "It became obvious that Ackermann couldn't secure this."

Ackermann's withdrawal coincides with news that German prosecutors have searched the offices of Deutsche Bank executives and former executives, including Ackermann himself, following allegations that they gave false testimony in a trial brought against the bank by late German media mogul Leo Kirch.

This investigation hasn't helped Ackermann's supervisory board ambitions, the second person added. As the bank's top supervisor, it would mean Ackermann would have to lead investigations into his own actions.

Separately, Allianz said its financial chief Paul Achleitner has signaled Deutsche Bank that he is available for the supervisory board post.

Achleitner would leave the insurer's executive board at the end of May, should Allianz's supervisory board release him from his contractual obligations. An Allianz spokesman declined to comment further.

Allianz Chief Executive Michael Diekmann said in a memo to staff, seen by Dow Jones Newswires, that Achleitner's departure would be a great loss to the company but also recognition of Achleitner's "extraordinary contribution to the success of Allianz in the last decade."

Allianz, Europe's largest insurer by market capitalization, said a successor for Achleitner on the company's management board will be appointed by its supervisory board in due time.

Allianz will inform all employees about the next steps, respecting the governance of both companies, CEO Diekmann said in the memo to staff.

He also lauded Achleitner's "extraordinary contribution to the success of Allianz in the last decade that he shaped within our team with intelligence, foresight and an outstanding performance, witnessed by our superior investment results."

He noted that Achleitner's 30 years of capital markets experience qualify him for the challenging job.

Achleitner's appointment could shift the weight at the helm in favor of investment banking once Anshu Jain and Juergen Fitschen jointly assume CEO posts next May. Austrian-born Achleitner, 55, joined Allianz in 2000. Prior to that, he worked 11 years for investment bank Goldman Sachs in New York, London and Frankfurt.

Achleitner also is chairman of the German finance ministry's stock exchange specialist commission and a member of the takeover board of the German government's Federal Financial Supervisory Authority, or FFSA.

German Finance Minister Wolfgang Schaeuble told Handelsblatt in an interview that he welcomes Ackermann's decision. It is not usual procedure for a CEO to switch directly to supervisory board chairman, Schaeuble said, adding that Ackermann will remain a competent adviser for politicians.

-By Eyk Henning, Ulrike Dauer and Laura Stevens, Dow Jones Newswires, +49 69 29 725 108; eyk.henning@dowjones.com