Big buybacks are back at Deutsche as valued staff leave

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Deutsche Bank buy backs

Deutsche Bank is doing it again. As staff it wants to keep threaten to walk away, it's reportedly offering substantial inducements to make them stay around.

Various headhunters in London tell us they have tried to lift staff from Deutsche Bank in recent weeks, but that the bank has been offering buy-backs of up to 50% or more to make them stay.

"There are a lot of counteroffers at Deutsche Bank," says the head of one fixed income search firm, speaking on condition of anonymity. "They're happy for some people to leave, but will bid-back strongly for staff they value."

Deutsche Bank is in the process of making 7,000 people redundant across the organisation. Around 5,000 are expected to come from the investment bank and CEO Christian Sewing has said he plans to make the "vast majority" of the front office cuts by July.  The bank is understood to have made big cuts to its London credit structuring team last week.

Nonetheless, there are also signs that people are leaving DB of their own volition. Yesterday, for example, Bloomberg reported that Ludovic Cohen, Sean Hammersley, Ben Nixon and Charles Sellem left the bank's London convertible bond trading team. Rumour has it that they're off to a combination of Bank of America Merrill Lynch, Goldman Sachs, HSBC (possibly) and an investment fund. Rob Saunders an ex-Irish rugby international who previously ran the team is also understood to have left.

Similarly, Financial News reported today that a team of seven people, including Angelo Haritsis, an ex-Goldman Sachs MD who had been leading Deutsche's fixed income strats function, has followed Sam Wisnia to hedge fund Eisler Capital.

The fact that Deutsche's share price is hovering around €9.5 is unlikely to help the German bank retain top staff. Deutsche famously offers its most senior managing directors stock which vests all at once five years after the issuance date. This has historically helped tie people in, but with the share price down 42% since December, recipients may be keener to get that stock bought out by a new employer in case it falls even further. One headhunter said a candidate left even after the buy-back: "They offered a 45% uplift but he left anyway. Some people just want to get out."

Deutsche Bank declined to comment. In a presentation last week, Sewing highlighted the areas he wants to grow. They include: FX, credit and debt origination. Headhunters said the bank appears to be dumping structurers and moving towards flow credit traders - much like Goldman Sachs.

During that same presentation, Sewing promised not to scrimp on bonuses this year and intimated that the bank may yet offer a new retention package to selected individuals. The previous retention packages, paid in 2017, are only worth something if the bank's share price hits €23 in early 2021. 

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