If you work in Danske Bank’s retail unit, you have reasons to fear for your job security. It closed 67 branches in the first half of 2012 (including 31 in Denmark) and has plans to shut more before the end of the year. In its wholesale divisions, however, headcount is stable and – in some cases – compensation has increased.
The bank’s plans to cut 2,000 jobs as it implements its new strategy will be completed by 2013. So far, however, employees within its markets, corporate& institutional banking (CIB) and Danske Capital (asset and wealth management) divisions have remained unscathed.
There are now 841 employees in the markets division (856 in Q2 2011), 307 in CIB (304 last year) and 569 in Dankse Capital, up from 548 during the same period in 2011.
To be fair, most of these units have been performing better in the first half or 2012 – CIB posted revenues of DKK1.48bn for the period (up from DKK1.44bn in 2011), while its markets division improved from DKK4.5bn last year to DKK4.9bn in 2012. Danske Capital slipped from DKK924m in 2011 to DKK859m in the first half of this year.
Danske Bank is also paying its traders larger bonuses. Expenses in the markets division increase by 11% year-on-year, primarily as a result of increased performance-based compensation. What’s more its cost-income ratio is running at a very reasonable 31.5%.
The reality is that it’s unlikely that any division within Danske Bank will escape the cuts entirely, but for the time being traders, investment bankers and asset managers are making a good case for their retention.