Deutsche Bank cuts investment banking jobs as M&A deals dry up – source

  • Costs have been a challenge for the bank
  • Deutsche had started hiring in the division after the layoff
  • Bank expected to extend earnings streak in third-quarter report

NEW YORK, Oct 20 (Reuters) – Deutsche Bank AG (DBKGn.DE) has cut staff in the origination and advisory segments of its investment banking unit, according to a source familiar with the matter, as a Declining finance deals are forcing lenders to limit fees.

The decision was communicated to the US team on Wednesday, said the source, who requested anonymity because the matter is confidential, calling it an annual exercise to manage the number of bankers without specifying the number of jobs cut. .

Investment bankers were inundated with deals in 2021 but saw little this year as firms halt takeovers and listings amid volatile capital markets, US-China tensions and the Russian-Ukrainian war.

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The job cuts have primarily affected junior bankers, Bloomberg News and the New York Post reported earlier Thursday.

Last month, Wall Street’s top investment bank, Goldman Sachs Group Inc, said it planned to cut jobs, after suspending the annual practice for two years during the COVID-19 pandemic, the company told Reuters a source familiar with the matter at the time.

A Deutsche Bank spokesman declined to comment.

The move is a setback for Deutsche, whose investment bank has in recent years rebounded from being its problem child to its biggest revenue generator thanks to a pandemic business boom and deal frenzy.

Until recently, major investment bankers had said they wanted to expand advisory services further. Last year, Germany’s biggest lender began cautiously hiring new staff at its investment bank.

The bank continues to selectively invest in the global origination and advisory (O&A) team in areas including technology, healthcare, industrials and sponsors, the source said.

It has hired 15 bankers, including managing directors globally in 2022, the source said, including Robert Lee who leads the semiconductor business in his technology, media and telecommunications (TMT) group in the Americas. Read more

This return to hiring was significant for Deutsche after years of losses, cutbacks and layoffs.

But costs have been an ongoing struggle for Deutsche. In July, it dropped its full-year cost target.

This is a crucial year for lender and chief executive Christian Sewing as he tries to meet the 2019 targets he set during a costly overhaul of the bank.

The bank released its third quarter results on Wednesday. Analysts expect it to post a ninth straight quarter of profits, a notable streak after years of losses.

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Reporting by Mehnaz Yasmin in Bengaluru, Saeed Azhar in New York, Tom Sims in Frankfurt; Editing by Vinay Dwivedi, Josie Kao and David Gregorio

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