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What will become of Deutsche bankers when Ackermann goes?

The revelation that Deutsche made €4.8bn of losses in the fourth quarter is bad news for its investment bankers in more ways than one. Paltry bonuses are a given, but it also makes it unlikely that an investment banker will replace chief executive Josef Ackermann when he retires next year.

Until recently, Anshu Jain, co-head of Deutsche’s investment banking unit, had been seen as a potential successor to Ackermann. But with an alleged €1.1bn of the losses directly related to trading, that now looks a lot less probable.

“Investment bankers will have a smaller voice in the institution in future,” says Simon Maughan, an analyst at CreditSights: “There’s been a shift in the power base.”

If someone like Rainer Nesker, head of Deutsche’s retail banking unit, replaces Ackermann, the shift is likely to be accentuated. Deutsche’s investment bankers could suffer further cuts in jobs or pay, or both.

Deutsche has already committed to a strategy of building its retail banking arm and this week agreed to purchase a 22.9% stake in Postbank, the leading retail bank in Germany.
But it’s the record fourth quarter loss that is turning heads in Frankfurt. De Welt today declares the end of an era that saw Deutsche transform from a conservative German retail bank into a ‘giant hedge fund.’

Following this week’s loss, Ackermann defended the performance of the investment bank, saying he remained a ‘strong believer’ in the business.

His successor may not be so sympathetic.

Comments (6)

  1. Deutsche is going back to being a nice and simple retail bank with an advisory business on the side, but then so is just about everywhere else. We’re all in the same position here.

  2. Ackermann had the right idea but the wrong traders,we all know who made the losses .It s adisgrace that most of them appear to be keeping their jobs and no doubt will get bonuses as well. If it is Nesker and he has a lot of internal support, he should do away with the idiots that have cost us all money.There would not be many crying at their departure..Shame on you the “Dis Credit ed” Trading Group

  3. I believe Juergen Fitschen, current head of Germany, will be given the top position next year. Prop trading etc will all go (or alread has) but the strengths of this business will prevail, i.e. FX, rates and their advisory business. Question is how much emphasis the group is stil going to put on its US business

  4. I have it from a very good source that the pan-European HQ of the advisory business is going to be based out of Germany from on. This decision has an across the board approval from the mothership no matter who is in charge. London is going to be a satellite operation in the future. Cost is the buzz word this year and London bankers are the costliest in all Europe…… Interestingly, although it’s not my area of expertise, I also found out that some of the best FX market makers in the bank are in Frankfurt.

  5. Guys,

    IB will be back. Look at JPMs results. Maybe demand for our services will decline but so does supply. Look at the dotcoms. Bubble burst, now its Web 2.0.

    Leaving the US doesnt make any sense at all since IB is a global business. Plus it is the single biggest market.

    Biggest danger is all the cheap state money being plowed into falling institutions around the globe. Will make for a challenging environment.

    We will prevail.

    From the floor Reply
  6. Ackermann and the Executive Committee (didnt most of them sell all of their DB stock already?) should resign. Not even ex-coworkers at DB understand how Ackermann can deleverage Deutsche. There are probably enough additional credit losses in the IB to wipe out the remaining equity capital of the bank – before DB even turns to corporate and retail credit exposure. DWS has had massive loss of AuM and PWM/PAM have never been top performers.

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