Private bankers at Deutsche Bank in Hong Kong and Singapore are feeling fairly upbeat about the reign of their new CEO, Christian Sewing. Investment bankers, less so.
Sewing, who had previously been overseeing Deutsche’s private and commercial bank (PCB) division, is thought to favour more aggressive restructuring of its beleaguered corporate and investment bank (CIB) than was advocated by his predecessor, John Cryan. “With news of his appointment, there are now more concerns about layoffs in the investment bank here,” says a source close to Deutsche in Asia.
Redundancies have been a feature of life at Deutsche in Asia for several years now. In 2012, the firm cut 900 people from its equities and corporate finance businesses in Asia and Europe, while the following year it announced that thousands of support roles were moving away from high-cost locations, including Singapore and Hong Kong.
Last year, employees in the two cities were cut under an international plan to shed 17% and 6% of its equities and fixed-income staff respectively, part of a strategy to eliminate 9,000 jobs globally. “Now, with a retail and wealth banker as CEO, the job cuts in the investment bank in Asia are expected to start again,” says Asia-focused IBD headhunter Jason Tan. “And they could be extensive.”
Sales and trading roles look vulnerable, especially in FX and rates. This unit underperformed in Asia last year, according to Deutsche’s 2017 earnings report. But Deutsche’s M&A and capital markets bankers have also lagged their competitors at other Western banks in Asia of late. In the first quarter, Deutsche ranked eighth for Asia (ex-Japan) M&A revenue and was not in the top-10 firms for ECM or DCM income in the region, according to Dealogic.
“DB in Asia has long been neither here nor there, with little vision or strategy about how to rebuild after the 2008 financial crisis,” says Tan. “When you deal with Deutsche on IBD hirings in Asia, its strategy seems to change about every six weeks.”
By contrast, Sewing’s appointment has been widely welcomed by its private bankers in Asia. Under Sewing’s former PCB stewardship, Deutsche Bank Wealth Management (DBWM) – part of the wider PCB division – has been growing its headcount in the region over the past year. Hopes are high that this expansionist strategy will continue with Sewing as CEO, says a second source.
“Deutsche will continue focusing on wealth management under the new CEO and will concentrate on key locations, including Asia,” says former Merrill Lynch private banker Rahul Sen, now head of wealth management at search firm The Omerta Group. “And because he was recently head of PCB, he will seek synergies on how wealth and investment banking can work together. He might look to the UBS model, where wealth is the core function and IB and global markets are supporting businesses.”
DBWM’s Asian hiring drive began in June last year when Lok Yim, DBWM’s Asia Pacific head, announced plans to add 50 client-facing roles – including relationship managers – in Asia during the second half of 2017. In December, Deutsche recruited six new RMs, all based in Singapore. It has continued to recruit senior RMs this year.
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