The quiet men who control the future of Deutsche's fixed income trading business

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Deutsche Bank fixed income

Deutsche Bank has turned to company lifers to rescue it in its hour of need. There's the new CEO, Christian Sewing, who joined as a teenager and only strayed for two years in 2005 before going back to DB again. And there's the new head of the corporate and investment bank (CIB), Garth Ritchie, who's now aged 50 and has been there since he was a 28 year-old who joined the equities division after starting his career at a bank based in South Africa.

If you work for Deutsche's CIB, Ritchie is therefore now your man. Despite being a dyed-in-the wool equities professional, Ritchie was made head of the whole global markets business back in 2015.  And why not? Morgan Stanley's fixed income business, for example, has thrived under Ted Pick, the profane ex-equities man who became co-head of MS equities in 2009 and then co-head of equities and fixed income in 2015. Under Pick, Morgan Stanley has become a sales and trading powerhouse. Under Ritchie, however, Deutsche's record has been more, "mixed."

Last year, revenues in Deutsche Banks equities trading division fell 19% compared to 2016, while fixed income revenues were down 14% over the same period. At Morgan Stanley, the comparable figures were -4% and -1%. During his reign, Ritchie has presided over a reduction in Deutsche's market share, both in equities and fixed income. In 2004, for example Deutsche ranked fourth globally for equities trading; by 2011 it was down to 7th. Since 2010, there have been ongoing attempts to revive the equities business, with little to show. Ritchie has been praised for being "straight-taking" and "fair," but not everyone's a fan. "Ritchie benefited from Anshu [Jain] and rode along that wave. He is thoroughly average," claims one Deutsche Bank insider.

Average or not, Ritchie will need help to revive Deutsche's trading fortunes. Assistance is most likely to be forthcoming from the lieutenants in his fixed income business. Last year, fixed income trading accounted for 68% of revenues in Deutsche's markets business. If the rot in the markets business is to stop, fixed income is therefore where Ritchie needs to start.

Deutsche's fixed income business is run by many men. Ram Nayak, a former Credit Suisse structurer hired by Anshu Jain in 2009, heads the division. But Deutsche insiders say it's Nayak's deputies, particularly in credit trading, who are of particular importance.

Unlike Citi, Deutsche Bank doesn't break out its credit trading revenues from its macro trading revenues. However, credit is where Deutsche excels: it ranked second globally for credit trading in 2017 according to research firm Coalition. For fixed income, currencies and commodities (FICC) trading as a whole, Deutsche ranked between fourth and sixth.

Deutsche's credit trading business is run by Chetan (Chetankumar Shah) and Ioannis (Yanni/John) Pipilis. The men became global co-heads of credit in 2015. Of the two, Pipilis is held to be the more powerful.

Like Ritchie and Sewing, Pipilis has been at Deutsche since time immemorial. He joined the German bank in 2000 and became global head of credit structuring in 2007. One of Colin Fan and Anshu Jain's army (along with Ritchie), Pipilis was among the perpetrators of a 2009 trade which allegedly saw five individual Deutsche traders benefit from a structure in which Deutsche bore the costs and the traders involved made millions. The other four protagonists have since left the bank. Pipilis alone remains. Deutsche has investigated the case and says it's closed, but insiders in other divisions said the incident is still viewed with skepticism internally.

Beyond Pipilis and Shah, the key men in Deutsche's contemporary credit business are Armin Rothauser and James Davies, the global heads of credit financing & solutions. Davies also runs credit structuring. Rothauser joined from Goldman in 2014. Davies is another DB lifer who joined in 2000.

In macro, Kemal Asker, who joined DB in 2000, is head of rates trading now that Sam Wisnia has left. Asker joined from J.P. Morgan in 2014 and is said to be very well respected internally. Meanwhile, David Wayne, who was head of FX trading until last year, is now heading the strats and analytics team set up by Wisnia, alongside his remit as head of electronic trading.

Ritchie needs to hope his "top team" in fixed income trading remains steadfast. Headhunters say it almost certainly will: most of its members are sitting on five years' worth of stock bonuses (under Deutsche Bank's cliff vesting programme),  and are too expensive for other banks to buyout anyway. In the meantime, and despite reassurances from Ritchie that the strategy won't change radically, insiders say there's still fear that the bank could pivot back to Germany: "There was a dismissive line in Liar’s Poker of doing “equities in Dallas”. The fear now is doing retail in Hamburg...," says one.

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