Peter Selman, Deutsche Bank's global head of equities, has been rallying his troops. Today is the day that Deutsche Bank's bonuses drop into Deutsche Bank employees' bank accounts and in the case of U.S. equities staff (where there have been complaints of bonuses being reduced by 40%+ and cut to nothing at all), their arrival is more likely to generate a splish than a splosh. Hence the pep talk this morning.
Deutsche Bank didn't comment on Selman's morning stimulus. If you weren't there, this is what he said....It was met with desultory clapping on the U.S. equities floor.
1. It's not true what has been written about DB
Selman said several times that what has been written about Deutsche Bank is not true, that the bank has tried to correct these untruths but that media outlets have declined to cooperate. He wasn't more specific, but may have been referring to Bloomberg's claim that Deutsche Bank's U.S. equities unit made a $750m loss last year.
2. Deutsche Bank's equities business is as good as the rest
Selman said Deutsche's equities business is the same size as European competitors and as some U.S. competitors. Those other banks are happy with their businesses and investing in technology and DB is doing the same. DB has a fine equities business, said Selman. He is refocusing the business on a few big concentrated risks instead of many small ones.
3. Deutsche is making some big hires in equities trading
People want to work for Deutsche Bank's equities business. Selman said Deutsche has more people queueing up to work there than it can accommodate. Yesterday, Deutsche announced that it's recruited Greg Sutton head of program trading, ETFs and electronic trading at Citi, as head of program trading and the replacement for Yao-Chung King ('Yao King'), its head of program trading who left on 1 March.
Selman said program trading is a focus for DB this year and that the bank is hiring globally. Hutton is one of several hires in the pipeline, with more announcements to come. Not all members of Selman's team were reassured by this. -There are unconfirmed rumours internally that Hutton has received a multi-million dollar guarantee, which raised eyebrows after most people had their bonuses cut.
4. Deutsche is making some big hires in equity research
It's not just trading. Deutsche is also hiring in equity research. Selman said the bank wants to hire in biotech, healthcare and medtech in 2019, with supporting hires in the investment banking division.
5. Don't be put off by the people who left
Several very senior people have left Deutsche's U.S. equities business in recent weeks (Yao King, Brad Kurtzman, Craig Bench). Selman said remaining staff shouldn't be perturbed - the staff who've quit have gone to clients instead of competitors, and will therefore go on to become clients themselves.
6. The prime business is doing great
Yesterday, Bloomberg said Deutsche's prime business is in a "downwards spiral". Today, Selman said this is not so. Clients have been telling the bank that Deutsche's prime platform is one of the best on the Street, said Selman. And the firm has reengineered its platform to make it way more efficient with less capital.
7. Individuals need to make the extra call, go to the extra client dinner, ask for the extra order
Selman touched very lightly upon the recent bonus round. Compensation wasn't intended to send a tough message, he said, but it had been a tough year and shareholders had a tough year too. In future, costs will be reduced in equities thanks to an 'activity-based cost' initiative from the CFO, which might help bonuses for 2020 (although Selman didn't say so explicitly)...
Until then, Selman is urging DB's equities people to go for growth by making small changes. In an echo of Pablo Salame's attempt to motivate Goldman Sachs sales staff by telling them to 'add butter', Selman (who came from Goldman) said DB staff need to make extra calls, attend extra dinners and ask for extra orders.
8. The interns are coming
Lastly, Selman said previously that he was all about hiring juniors. Despite the arrival of big hires like Sutton, this doesn't appear to have been forgotten. This summer, 35 interns will join DB's U.S. equities floor. They are the future, said Selman. Anyone still disgruntled with their bonus by then will clearly be expected to put it aside and show some enthusiasm.
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