Credit Suisse’s sales and trading business is run by a former accountant. Deutsche Bank’s is not. We’d suggest you can see the difference in the charts below, taken from the banks’ recently published annual reports.
Deutsche Bank made money on 87% of trading days last year. As the chart below shows, the German bank generally made a profit, but when it made a loss, that loss was sometimes big. There were around six days when Deutsche Bank lost more than €50m last year. At Credit Suisse there were none.
Compared to Deutsche’s, Credit Suisse’s sales and trading business looks very nice and sensible. The Swiss bank’s traders made money on 99% of days last year. They never lost more than CHF25m (€23.4). They never shook the tree only to find something unexpected fell upon their heads. Admirable, except…
…Credit Suisse’s trading business looks a bit boring. When profitable days at the two banks are compared in the final chart below, it becomes apparent that while Credit Suisse’s traders didn’t make much of a loss on many days last year, they didn’t make much of a profit either. Despite a few outliers, Credit Suisse’s trading business specializes in making daily profits of between CHF0-25m and CHF0-50m. Deutsche Bank’s traders are much more likely to make profits in excess of €50m (CHF53m) and €100m (CHF107m).
The implication is that if you want a trading job where you play it safe, join Credit Suisse. If you want a trading job where you don’t, join Deutsche Bank.
This makes sense. Brian Chin, head of the global markets business at Credit Suisse, studied accounting and started his career at PWC. Unlike previous heads of the markets business (eg. Gael De Boissard), Chin isn’t a trader by profession.
By comparison. Deutsche’s global markets business is run by Garth Ritchie, a man steeped in derivatives trading. As such, Ritchie is far more likely to understand that in order to make a big profit, you sometimes have to risk a biggish loss.
Some Credit Suisse insiders say Chin shouldn’t be dismissed so quickly. “He’s a trader’s trader,” says one. “- It’s just his leash is extremely short.”
Distribution of daily trading income at Deutsche Bank in 2016
Source: Deutsche Bank
Distribution of daily trading income at Credit Suisse in 2016
Source: Credit Suisse
Photo credit:City Coaster by Henry Burrows is licensed under CC BY 2.0.