Deutsche Bank cuts investment banking jobs as M&A deals dry up – sources | Techy Kings

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  • Cost has been a challenge for banks
  • Deutsche has started hiring in the division after the layoffs
  • The bank is expected to extend its profit streak in the Q3 report

NEW YORK, Oct 20 (Reuters) – Deutsche Bank AG ( DBKGn.DE ) has cut staff in its origination and advisory segment of its investment banking unit, according to a source familiar with the matter, as pullbacks in financing deals forced lenders to limit costs.

The move was communicated to US staff on Wednesday, the source said, speaking on condition of anonymity because the matter is confidential, calling it an annual exercise to manage the number of bankers without specifying the number of jobs being cut.

Investment bankers are flooded with deals in 2021 but have seen little this year as companies halt buybacks and listings amid uncertainty in capital markets, tensions between the United States and China, and the Russia-Ukraine war.

The job cuts affect mostly young bankers, Bloomberg News and the New York Post reported earlier on Thursday.

Last month, major Wall Street investment bank Goldman Sachs Group Inc said it planned to cut jobs, after halting the annual practice for two years during the COVID-19 outbreak, a source familiar with the matter told Reuters at the time.

A Deutsche bank spokeswoman declined to comment.

The move is a setback for Deutsche, whose investment bank has in recent years turned from a problem child to its strongest earner thanks to a pandemic trading boom and deal-making frenzy.

Until recently, senior investment bankers said they wanted to further expand advisory services. Last year, Germany’s biggest lender began aggressively hiring new staff at its investment bank.

The bank continues to invest selectively in global origination and advisory (O&A) teams in areas such as technology, healthcare, industrials and sponsors, the source said.

It is hiring 15 bankers including managing directors worldwide in 2022, the source said, including Robert Lee who heads the semiconductor sector in the technology, media & telecom (TMT) group in the Americas. read again

A return to hiring is important for Deutsche after years of losses, layoffs and layoffs.

But cost has been an ongoing struggle for Deutsche. In July, it lowered its cost target for the full year.

This year is crucial for the lender and Chief Executive Christian Sewing as he tries to hit the 2019 targets he set in a costly bank overhaul.

The bank reported third-quarter earnings on Wednesday. Analysts expect it to report a ninth consecutive quarter of profit, a notable streak after years of losses.

Reporting by Mehnaz Yasmin in Bengaluru, Saeed Azhar in New York, Tom Sims in Frankfurt; Editing by Vinay Dwivedi, Josie Kao and David Gregorio

Our Standards: Thomson Reuters Trust Principles.

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