Morning Coffee: Pity the Goldman Sachs bankers who joined Deutsche. Credit Suisse banker quits for crypto

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Pity the Goldman Sachs bankers who joined Deutsche

You’re part of a group of hotshot new hires from Goldman Sachs intent on spreading the GS ethos across your new bank. As more people like you join, you feel more empowered…then suddenly it all goes wrong. That now seems to be the scenario facing former Goldman investment bankers who moved to Deutsche Bank in London and New York, but now find themselves at a firm that is pivoting quickly toward retail and commercial banking in Germany.

Goldmanites within the upper ranks of Deutsche’s corporate and investment bank include Alasdair Warren, who joined in 2015 to lead IBD in London. This year, Deutsche has hired Paul Huchro to head investment-grade and high-yield credit trading in the US and Europe, and Peter Selman to run its global equities division. Deutsche also recruited several senior macro solutions professionals from Goldman during the first quarter.

These and other recent GS recruits in NYC and the City were likely inspired to join Deutsche by its ongoing drive to compete with and even mimic Goldman in global IBD. But now, with German retail banker Christian Sewing taking over from British investment banker John Cryan as CEO, they face a more uncertain future as the bank takes on a more domestic focus.

Sewing is expected to turn Deutsche’s attention toward vanilla lending to German companies and consumers. Management decisions will mainly be made locally. “The bank will now be steered more strongly from Germany,” supervisory board chairman Paul Achleitner said yesterday.

While this power shift may be an unwelcome development for ex-GS investment bankers at Deutsche, it is being loudly cheered by the German media. Bild, the country’s most popular daily newspaper, greeted Sewing’s appointment with the headline: “Deutsche Bank back in German hands”.

Not all the Goldmanites hired by Deutsche have stuck around to witness the German takeover. Sam Wisnia, who joined DB from Goldman Sachs in 2014 as head of macro trading, left in late March to join Eisler Capital, the $2.6bn macro hedge fund. Others may now be tempted to follow his lead.

Separately, even as Morgan Stanley warns that the Bitcoin bubble is bursting, some investment bankers remain drawn to cryptocurrencies. Brian Wirtz, a Credit Suisse TMT investment banker and arguably the firm’s most passionate crypto advocate, is leaving for a ICO advisory firm. While Wirtz reportedly tried to steer CS toward doing more crypto-focused deals, the bank’s CEO, Tidjane Thiam, has expressed his scepticism about the sector.

Meanwhile:

Dumping Cryan will likely cost Deutsche €7m. (Financial Times)

Bernstein says you should buy Goldman. (CNBC)

For banks, not all volatility is created equal. (Bloomberg)

FX hedge hunds haven’t benefited from volatility either. (Bloomberg)

HSBC continues China push, despite losses. (Reuters)

Goldman breaks out the kombucha in San Francisco. (Independent)

Don’t socialise for more than three hours a day. (Science Direct)

Coffee helps you process information better. (BPS)

Image credit: kieferpix, Getty

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