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Morning Coffee: Deutsche turning to Goldman Sachs for investment bank rescue. Slim pickings at Credit Suisse

twin towers of deutsche bank in sunset, Frankfurt

Deutsche Bank is mounting a come back in its investment bank by raiding Goldman Sachs. First came Sam Wisnia, who joined in 2015 to replicate Goldman’s powerful risk pricing system SecDB, which helped it navigate the 2008 financial crisis. Then, in October 2015 it brought in Alasdair Warren, Goldman’s head of the financial sponsors group in EMEA, to lead its investment bank in London. Goldman partner Paul Huchro joined Deutsche last month to head investment-grade credit trading and lead high-yield credit trading in the US and Europe.

Now, Peter Selman, a former Goldman Sachs partner and co-head of global equities trading and execution services in New York, has just come on board to lead Deutsche Bank’s equities business. Selman, who retired from Goldman in September last year, will take over from Tom Patrick as head of Deutsche’s global equities division. Patrick was promoted to head of Deutsche’s Americas business in August, and has relinquished his responsibilities as head of the stock trading business to focus on this role, according to Financial News.

Selman spent his entire banking career at Goldman Sachs, having joined after completing a degree in economics from Cambridge University in 1994. He began as an associate in equity derivatives. Having made it to head of equity derivatives in London, he relocated to New York in 2007, where he has remained ever since. Despite spending a large proportion of his career on Wall Street, Selman originates from the UK seaside town of Margate. It might be approaching gentrification now, but like most British coastal towns Margate has long been struggling. Selman hasn’t forgotten his roots – in 2013, he orchestrated a £530k donation from Goldman Sachs Gives to the Turner Contemporary gallery in Margate.

Selman may therefore be one of the striving fighters from difficult backgrounds that Goldman is known to favour for its graduate programme, and he’ll need that mentality to turn around Deutsche’s struggling equities business, which is down 18% for the first three quarters of 2017. CEO John Cryan said that it was planning more investment in its equities business: “The equities business continues to need more investment in infrastructure and people, which we plan to make,” he said during the bank’s second quarter results call.

It may be about time. Andre Crawford Brunt, Deutsche’s former head of equities trading who retired in July last year, told us previously that equities teams across investment banking were struggling: “Banks are under huge pressure in their equities business – the starting cost bases are too high, technology continues to compress commissions, equity research is being democratized, there’s less capital commitment and banks proprietary businesses have been closed,” he says.

Separately, while Deutsche has already promised bigger bonuses to its employees to prevent an exodus after some brutally low payouts last year, Credit Suisse is unlikely to follow suit. CEO Tidjane Thiam, who is accepting a smaller bonus this year, told Bloomberg that Credit Suisse bankers should not get their hopes up.

“This year, with the improvement in results, there will be a balance,” he said. “You should not expect anything spectacular, but something fair. Not a big increase compared to the previous year.”

Meanwhile: 

Banks are cramming into a cryptocurrency conference they have never bothered with before (Bloomberg)

Hedge funds are too busy trying to keep their heads above water to bother with AI (Bloomberg)

Think Brexit is bad, Jeremy Corbyn in power could be a lot worse, says Morgan Stanley (Daily Mail)

Brexit concerns at fintech start-ups: “It isn’t just that we’re at risk of losing our engineering talent. We might lose our ping-pong stars as well.” (Bloomberg)

90% of bankers are worried about Brexit (Bloomberg)

SocGen is growing its investment bank, with a focus in its traditional strengths in equity derivatives, structured financing and prime brokerage (Reuters)

Yep, Wells Fargo employees were offered big bonuses to over-charge clients (WSJ)

Goldman Sachs is copying Google and Amazon to solve its data problems (Waters Technology)

Nearly half of City workers experience mental health problems as a result of their work. It’s an expensive problem, costing £100m a year (Financial News)

Have a tip, story or comment? Contact: pclarke@efinancialcareers.com

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