As bonuses land at Deutsche Bank in Asia, the firm’s investment bankers and traders are likely casting an envious eye at their colleagues in wealth management. Deutsche’s private bankers in Hong Kong and Singapore have been well rewarded this bonus round and their division continues to hire, but bonuses in the corporate and investment bank (CIB) are generally down as staff look for an exit, say headhunters.
As we reported earlier this week, CIB bonuses at Deutsche in New York have taken a big hit, but US sources also told us that Wall Street and London staff at least fared slightly better than their divisional counterparts in smaller markets. They appear to be right when it comes to Hong Kong and Singapore.
The German bank declined to comment on its Asian bonuses, but one Deutsche insider in Hong Kong told us that front-office CIB bonuses in Hong Kong and Singapore have shrunk by about 30% year-on-year in both corporate finance and capital markets. This is more than the 10% to 15% global decline predicted in January by Bloomberg.
“It certainly wasn’t pretty in equities,” adds a source with knowledge of bonuses for equities traders at Deutsche in Hong Kong, without providing further detail. Trading bonuses have also fallen at banks such as Credit Suisse and HSBC as Asian markets tanked in the fourth quarter.
Meanwhile, investment banking (ECM, DCM, M&A) bonuses have been “disappointing” at Deutsche in Hong Kong and Singapore, says a Singapore-based headhunter, speaking on condition of anonymity. He has been contacting Deutsche Bankers recently and many of them have been open to discussing leaving the firm.
Another front-office recruiter in Singapore says he hasn’t needed to call many investment bankers from Deutsche, because they are contacting him first. “I’m getting plenty of approaches – people are looking to get out of the bank as fast as possible,” he says. “The issue is not just that bonuses were bad again, but also that they feel there’s no light at the end of the tunnel for Deutsche’s investment bank.”
Deutsche Bank has theoretically finished restructuring its struggling investment bank, but CFO James Von Moltke has indicated that he is willing to cut pay if revenue growth stalls again. “In Asia, recent departures and potential departures at Deutsche are all from the CIB side,” says the second Singapore headhunter. “And as a recruiter, placing a candidate into a job at DB’s investment bank is now a non-starter. I can’t in good conscience recommend it,” he adds.
Don’t feel too sorry for people who want to exit Deutsche on the back of bad bonuses, at least if they’re still young. As we reported earlier this week, the front-office job market in Singapore and Hong Kong is fairly buoyant up to VP level. “It won’t be difficult for DB folks to find work, provided they’re realistic on salary expectations,” says the first Singapore-based recruiter.
Meanwhile, there’s no such bonus angst among Deutsche’s private bankers. The firm’s wealth division in Asia pays about 15% of a banker’s revenue as a bonus, and this percentage barely changes each year, says former Merrill Lynch private banker Rahul Sen, now a global leader in private wealth management at search firm Boyden. “PB bonuses are holding strong in spite of all the mess that Deutsche’s IB and markets units are in,” he says.
Private bankers at Deutsche in Asia were “paid pretty good 2018 bonuses by market standards”, says the second Singapore recruiter. “And there’s been almost no departures. The firm is very serious about the PB side and is taking good care of its current people,” he adds.
Deutsche is also adding new relationship managers. Its private bank hired 100 RMs and support staff in Asia in the first half of last year alone, Lok Yim, head of emerging markets wealth at Deutsche, said in August, adding that he planned to keep on recruiting. “Deutsche is in hiring mode, but bankers are now doing a lot more due diligence before they accept offers,” says Sen. “They don’t want to end up in a situation where the bank is sold or merged with Commerzbank in the near future, as the balance sheet could get locked up,” he adds.
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