The Future of Deutsche Bank?
Does anyone have knowledge on what positions DB is cutting within IB? Is it mostly senior people or are junior bankers also affected?
Previously, DB said 10% of the U.S CIB jobs would be cut. Then, DB confirmed yesterday that 7,000 jobs would be cut globally. I'm not sure if more cuts are on the way, or if this could be a great opportunity to join a bank that is on its way to recovery like other banks have done in the past after annoucing similar restructing goals.
Would you not say that all these cuts are looking to make DB a strong MM rather than a BB in the next 5 years?
The company will remain strong but will be more sector specific. It remains a BB. Cuts will be made mostly to support roles that sit in the front-office, which they have a lot of. The problem they're running into is labor laws in Germany make it difficult to cut people there.
Yes, that's the purpose of the cuts. They were announced two years ago. The CEO couldn't bring himself to do it. That's why he got fired last month.
I can't weigh in on exactly who and what gets the ax, but I can share a high level view, having just done a research note for a UHNW client who custodies there.
Current CDS prices give an implied 10% chance of default within a year. That sounds bad, but up to a year and a half ago the default probability was 20%+. This doesn't necessarily mean there's now an actual 10% chance of default. It's more a gauge of market sentiment about the riskiness of the debt, and by extension, the bank as a going concern. In essence, the perceived riskiness of the debt has plunged, but the stock price has also plunged, down 30% in the last year. Either the stock investors or the CDS buyers must be wrong, one or the other.
How does DB weather the crisis? In my view, in addition to executing the cuts remorselessly, they dump all possible financial pain into the current quarter and then they have a fair chance for turnaround in the 2nd half of the year, under the new CEO. I'd second the poster who said DB is a buy. Or to be more careful, might be a buy. Its price/book is 0.4 whereas comps average 1.1.
IMO the German gov't will bail them out if necessary, although common stockholders may go to zero if that happens, with bondholders getting a big haircut.
Obviously, they need to get out of unprofitable/unsalvageable businesses, and above all, cut headcount. In this environment, DB would logically be the very last place you'd want to start an IB career. They can't just shut down the SA/Analyst hiring pipeline, but they're quite capable of hiring ppl only to lay them off weeks later. I've seen it done at other BBs.
The silver lining in the career risk is if you get laid off six weeks after you start, is there's no stigma, and potential new employers will give you a look out of sympathy. (Good luck getting out of your NYC apt. lease though.)
Oh and what about the fate of custody assets if they do go under? I had to tell the client nobody knows, because no major global custodian has ever been dissolved. However, we didn't recommend he switch custodians. Personally, I think the custody assets are pretty safe and if I were still a value guy I'd be building a long thesis for DB right now. The negative sentiment of sellside analysts is positively frightful. When/if that turns, DB could easily be a 3-bagger.
I am sorry, when did you see 10% probability of default? I see 5 year Subordinated CDS has peaked just shy of 250, 1 year was a fair bit lower, unless Bloomberg is fooling me somehow
No, if you understand BB/MM by the size/nature of the deals they do and the clients they cover. They will just do it more selectively, rather than try to be full-service. In concrete examples: they are still going to cover the likes of Siemens or GE, rather than drop them for random Mittelstand industrials.
Apparently, these cuts will be mainly within the commercial banking unit, especially the "Postbank". Additionally, DB wants to scale back equity trading, especially in the US (but also around the globe).
The numbers are supposed to be achieved via natural fluctuation of 1,500 employees per year over the next (up to) 4 years (i.e. people that retire / leave will be replaced at a reduced rate). I don't see any further cuts within CIB - Corporate Finance in these annoucements (aside from the previously discussed ones (e.g. cutting bottom 5% annually)).
Sources:
https://www.ft.com/content/0c29148e-555c-11e8-b3ee-41e0209208ec
http://www.handelsblatt.com/finanzen/banken-versicherungen/radikale-ein… (in German)
What's going on at Deutsche Bank (Originally Posted: 06/23/2010)
Saw this before at MS beginning of 2010.. a lot of changes at the senior level and now DB is making a lot of headlines especially in equities. What's going on there?
Deutsche Bank Equities Co-Head Karofsky Takes Leave (Update2) Share Business ExchangeTwitterFacebook| Email | Print | A A A By Ambereen Choudhury and Zachary R. Mider
June 23 (Bloomberg) -- Deutsche Bank AG’sRobert Karofsky, the New York-based co-head of equity sales and trading worldwide, is taking a leave of absence for personal reasons, effective immediately, bank spokesman Ted Meyer said.
Barry Bausano, 46, a prime brokerage executive also based in New York, was appointed head of the equity unit in the Americas, Meyer said, declining to comment further. Karofsky, 43, heads the global business with Garth Ritchie in London.
Anshu Jain, who oversees Deutsche Bank’s markets businesses, has made U.S. equities a priority and is planning to spend 1.6 billion euros ($1.96 billion) on hiring and technology in the next two years to break into the top five in U.S. cash equities and in commodities.
Karofsky was part of a group of eight traders Jain hired from Morgan Stanley in 2005 to help boost Deutsche Bank’s market share in U.S. stock trading. The firm advanced from 17th in 2004 to 7th place last year, according to data compiled by Bloomberg.
Karofsky, who had spent 14 years at Morgan Stanley, was promoted to his current post, co-head of global markets equity, in 2008.
Deutsche Bank had 2.73 billion euros of net revenue from equity sales and trading in 2009, about 14 percent of the total for the corporate and investment bank. Germany’s biggest bank had a profit of 4.96 billion euros last year after a loss in 2008.
Bausano remains co-head of global prime finance in addition to his new duties, Meyer said.
To contact the reporters on this story: Ambereen Choudhury in London at [email protected]; Zachary R. Mider in New York at [email protected]
Deutsche replaces Welch, adds Asian equity sales execs Murray Wilson is the new head of equity research sales for Asia ex-Japan, replacing Tom Welch, and the bank has made other appointments across the region. By Joe Marsh | 22 June 2010 Keywords: deutsche bank | deutsche | murray wilson | tom welch | philip tiffin Deutsche Bank has named Murray Wilson as head of equity research sales for Asia ex-Japan and made four other appointments across sales trading and electronic trading coverage in Hong Kong, Mumbai, Singapore and Taipei.
Wilson replaces Tom Welch, who resigned in April, but has not indicated where he's moving next. Wilson transfers to Hong Kong from Deutsche Bank in New York where he was head of international sales. He reports to Rob Ebert, Asia head of the institutional client group for equity, who recently joined the bank. Wilson has equity sales experience across markets in Asia, Europe and the US, as well as global emerging-market sales.
Philip Tiffin joins in the newly created role of head of equity sales trading for Taiwan and reports to Marlon Sanchez, Asia head of sales trading. Tiffin formerly worked at Morgan Stanley where he was Asia head of sales trading, but left some time ago. Before that, he was a partner and head of trading at Tantallon Capital Advisors and a sales trader at Goldman Sachs in Hong Kong.
Tip of the iceberg...
In London - Head of Financial Sponsors, Head of Leverage Finance, Head of High Yield Capital markets all went to Merrill. Lots of defections all over the place, ECM, M&A, etc.
Might be due to change in strategy, byt the fact that they havent written off any of the shit they have on the books yet. But overall, I think DB culture jsut really really sucks.
Twin heads of Lev fin, and the one who left was lesser of the two. Viewing these as 'defections' is somewhat strange given that the vast majority were simply out and out poaching with large guaranteed contracts. These guys weren't shopping, others wanted them and all banks have had an especially turbulent time of it recently.
DB wrote off plenty, just managed to get through without the vast amount of govt support everyone else needed. Issues with European sovereign's definitely.
Would strongly dispute idea that culture 'sucks' and also a glance at both European and Worldwide league tables would show steady upward progression on advisory and capital markets sides.
I echo the bad culture.
Can someone specify what they mean by "bad culture"? I read in another thread that they had a no-asshole culture or something.
every bank says they have a no-asshole culture
nomura grabbed a ton of db guys this month as well: co-head of natural resources, chairman of canadian division (and vice chairman of americas), and deputy head of m&a in australia
i think those were just a matter of nomura paying a ton though
it's also interesting that they are hiring a bunch at the senior level but losing a lot at that level too - is it a sign of bad culture or reshuffling/positioning itself?
there is an obvious exodus going on at the senior level. might be somehow connected with the fact that anshu jain is now the single head of DB's investment bank after michael cohrs left. additionially, jain is traded as ackermann's successor as CEO after 2011.
DB still has a ton of exposure to eastern bloc countries that they haven't written down to the extent that they probably should.
what is the deal with jain? i know he came up from trading
are the investment bankers getting scard like the gs ones got scared when lloyd came on?
Paul Whyte, co-head of RELG (Real Estate, Lodging and Gaming) at DB just jumped ship to Credit Suisse.
According to research provided by the onion, Deutsche Bank is experiencing minute errors caused by it's trading group after they shorted the VIX based on an internet meme. Expect a full-recovery around this time 20 years from now.
How is DB NYC doing? (Originally Posted: 07/18/2018)
Now that the storm has settled (all job cuts in corporate finance are finished i think... not that much cutting in nyc anyway), how is DB NYC looking? Still a strong brand name?
For current summer analysts, how has your experience been this summer? People keep making fun of how DB is no longer a BB but with all jokes aside, isn't it still on par with UBS and above RBC/WF? This is for IB btw
triggered
PM me, I’m summering there rn.
Out of PMs... could you PM me?
In general, I just wanted to see how the overall moral is at DB. Are ppl still trying to jump ship elsewhere? Is it true that they got rid of the whole M&A team and put ppl across different industry groups? How's the deal flow? What size deals are you looking at and is it mostly capital raising vs m&a?
Deutsche Bank Culture and Advice (Originally Posted: 01/30/2018)
How is the culture at Deutsche Bank? How does it compare to the other bb's?
Any relevant insights would be very useful!
Biggest question to ask to your contact in the bank is “how many MDs are in your group vs. how many analysts?” Maybe some are getting fired but most are leaving voluntarily at the senior level. I’ve heard that some groups literally don’t have MDs remaining. Just ask that question and you’ll know what your experience will be like.
check this article first:
https://news.efinancialcareers.com/uk-en/197643/like-work-deutsche-bank…
Here are some other ones to look at as well:
https://annualreport.deutsche-bank.com/2013/ar/deutsche-bank-group/cult…
https://www.indeed.com/cmp/Deutsche-Bank/reviews
https://www.db.com/careers/en/grad/about/culture.html
https://www.glassdoor.com/Reviews/Deutsche-Bank-Reviews-E3150.htm
Let me know if those help and if you have any questions/comments.
What's going on at Deutsche Bank (Originally Posted: 06/23/2010)
Saw this before at MS beginning of 2010.. a lot of changes at the senior level and now DB is making a lot of headlines especially in equities. What's going on there?
Deutsche Bank Equities Co-Head Karofsky Takes Leave (Update2) Share Business ExchangeTwitterFacebook| Email | Print | A A A By Ambereen Choudhury and Zachary R. Mider
June 23 (Bloomberg) -- Deutsche Bank AG’sRobert Karofsky, the New York-based co-head of equity sales and trading worldwide, is taking a leave of absence for personal reasons, effective immediately, bank spokesman Ted Meyer said.
Barry Bausano, 46, a prime brokerage executive also based in New York, was appointed head of the equity unit in the Americas, Meyer said, declining to comment further. Karofsky, 43, heads the global business with Garth Ritchie in London.
Anshu Jain, who oversees Deutsche Bank’s markets businesses, has made U.S. equities a priority and is planning to spend 1.6 billion euros ($1.96 billion) on hiring and technology in the next two years to break into the top five in U.S. cash equities and in commodities.
Karofsky was part of a group of eight traders Jain hired from Morgan Stanley in 2005 to help boost Deutsche Bank’s market share in U.S. stock trading. The firm advanced from 17th in 2004 to 7th place last year, according to data compiled by Bloomberg.
Karofsky, who had spent 14 years at Morgan Stanley, was promoted to his current post, co-head of global markets equity, in 2008.
Deutsche Bank had 2.73 billion euros of net revenue from equity sales and trading in 2009, about 14 percent of the total for the corporate and investment bank. Germany’s biggest bank had a profit of 4.96 billion euros last year after a loss in 2008.
Bausano remains co-head of global prime finance in addition to his new duties, Meyer said.
To contact the reporters on this story: Ambereen Choudhury in London at [email protected]; Zachary R. Mider in New York at [email protected]
Deutsche replaces Welch, adds Asian equity sales execs Murray Wilson is the new head of equity research sales for Asia ex-Japan, replacing Tom Welch, and the bank has made other appointments across the region. By Joe Marsh | 22 June 2010 Keywords: deutsche bank | deutsche | murray wilson | tom welch | philip tiffin Deutsche Bank has named Murray Wilson as head of equity research sales for Asia ex-Japan and made four other appointments across sales trading and electronic trading coverage in Hong Kong, Mumbai, Singapore and Taipei.
Wilson replaces Tom Welch, who resigned in April, but has not indicated where he's moving next. Wilson transfers to Hong Kong from Deutsche Bank in New York where he was head of international sales. He reports to Rob Ebert, Asia head of the institutional client group for equity, who recently joined the bank. Wilson has equity sales experience across markets in Asia, Europe and the US, as well as global emerging-market sales.
Philip Tiffin joins in the newly created role of head of equity sales trading for Taiwan and reports to Marlon Sanchez, Asia head of sales trading. Tiffin formerly worked at Morgan Stanley where he was Asia head of sales trading, but left some time ago. Before that, he was a partner and head of trading at Tantallon Capital Advisors and a sales trader at Goldman Sachs in Hong Kong.
How is DB NYC doing? (Originally Posted: 07/18/2018)
Now that the storm has settled (all job cuts in corporate finance are finished i think... not that much cutting in nyc anyway), how is DB NYC looking? Still a strong brand name?
For current summer analysts, how has your experience been this summer? People keep making fun of how DB is no longer a BB but with all jokes aside, isn't it still on par with UBS and above RBC/WF? This is for IB btw
DB is a buy opportunity
Deutsche Bank Culture and Advice (Originally Posted: 01/30/2018)
How is the culture at Deutsche Bank? How does it compare to the other bb's?
Any relevant insights would be very useful!
Example of a self fulfilling prophecy. For years they talked about cutting back the IBD, despite being top 10 in deal flow both in US and globally. Eventually all the negativity spilled out to put a huge damper on their reputation.
If you're going to exit a business, one should do so swiftly and abrutely, not debate about it publially for years. Terrible leadership leads to crushed morale.
Friend of a friend got cut from a front office IB role end of last week.
is it IBD?
That's what I heard - but it's all hearsay and I didn't really vet the source.
shit..how could angela merkel allow the country's largest bank to lose its global presence...
Bankers on the government
"There is too much regulation and oversight".....[bank starts to fail] "how could you let this happen, the government needs to help".
lol
Heard that 1st years in Consumer IBD, Industrials IBD also got cut. Don't know if this is true but supposedly a VP that was promoted two weeks ago was cut.
Heard via grapevine their M&A team is getting disbanded, with many of them brought into industrials group.
I know a few interns who were considering pulling out of the programme for summers, but then DB sent high ranking people to persuade them otherwise. So it seems they aren't halting any junior recruiting.
deleted.
Is this for summer 2018 or summer 2019?
summer 2019
Are there any groups within IBD that seem safer than Consumer/M&A etc.? Which IBD groups will be affected the least?
Lev fin, DCM
Speaking of LevFin...
Heard that London O&G and Healthcare teams in IBD have been cut pretty badly across all grades.
https://news.efinancialcareers.com/uk-en/316650/healthcare-redundancies…
Looks like it.
It always befuddled me that Germany is the global leader in manufacturing, design, engineering, and overall craftsmanship. Everything from cars to optical equipment to violins - they're #1 without a doubt.
Yet when it comes to banking, somehow they can't manage.
I have a personal conspiracy theory - there's a bigger force behind the scenes intentionally suppressing them for their WWII injustices.
Love the country, lived there for a combined 18 months in my life across various cities.
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