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Deutsche Bank is gearing up.

Morning Coffee: Deutsche Bank will start serious hiring in 2023. The companies that are poaching from Goldman Sachs

Fortunes change.  It’s less than four years since Christian Sewing had to write emails of admonishment to Deutsche MDs for getting fitted up for fancy suits while thousands of their colleagues were being made redundant.  As that cost-cutting program reaches its conclusion, though, a leaner and sharper Deutsche is apparently getting right back on the front foot, with Henrik Johnsson (Co-Head of Capital Markets and European Investment Banking) giving an interview in which he makes it clear that they want to recover the top league table position they lost to JPMorgan in 2016.

Rather than a drought or a disaster, he regards the 2022 deal environment as a “pause” which has “come at a good time for us”.  Having been understaffed in the 2021 boom, Deutsche has added coverage bankers, and used the less hectic market conditions to re-engage with clients and rebuild the franchise.  Going out into 2023, he expects to continue to hire bankers, and challenge “for the next M&A boom, which might be in three or four years”.

This might be seen as a message of hope for bankers at Credit Suisse, who can take comfort in the idea that even the darkest of times don’t last forever, and that if you can hold on to your job through the cost-cutting, you can get back into contention.  But it might not be such great news for ambitious employees at the likes of BNP Paribas.

After all, received wisdom in the industry is that there is room for exactly one bulge-bracket scale player in Europe, and at the start of the year, BNP were making it perfectly clear that this was their ambition.  The plan was described as “not completely mad” when it looked like a two-horse race against Barclays – if Deutsche are also challenging for the same title, the path to the top becomes considerably more complicated.

It could be a fascinating struggle for outsiders to watch.  On the one hand, BNP has some structural advantages – it has a domestic retail franchise which is a reliable cash cow, for example.  On the other hand, competition is in Deutsche’s DNA; although the days of Anshu Jain and “the Goldman of Europe” are in the past, there’s a natural swagger which even the cost-cutting program doesn’t seem to have destroyed. 

It helps that although Paris and Frankfurt are much more equivalent financial centres than they used to be, Deutsche probably has a stronger hinterland in terms of its relationships with the German corporate sector.  The difference between BNP and DB is in their relationship to the equity market – Deutsche shut down trading to concentrate on research and capital markets, while BNP will no doubt see its dominant position in equity derivatives as a franchise to leverage into cash equities.

What’s clear, though, is that Wall Street firms will not find it anything like as easy to dominate the rankings in Europe in the next cycle.  Bankers at Goldman, JPM, Citi and even Jefferies might want to bear that in mind when they’re agreeing targets and budgets over the next cycle.  Or, indeed, they might want to make themselves available to work on bringing the local challengers back to being national champions...

Elsewhere, analysis of staff moves for engineers at Goldman Sachs reveals that the place that more of them leave for than any other is Amazon.  This might be because many of them (like CIO Marco Argenti) moved from Amazon to Goldman in the first place.  Or it might be a reflection of the spirit of the age – it always used to be that there was a revolving door between “Government Sachs” and senior positions in the federal government, but nowadays, a sufficiently senior position at AWS might be the rough equivalent of Secretary of the Treasury.

Other than Amazon, there doesn’t seem to be much pattern to Goldman techies’ job moves – they go to other banks and fintechs like coders anywhere else, apart from a slight tendency to end up at startups being incubated by Goldman.  The analysis does seem to suggest (subject to some heavy caveats on data scraped from LinkedIn) that the Marcus consumer banking division has a harder time holding on to staff than other parts of the bank.  But since Amazon, among other tech giants, appears to have begun a hiring freeze, Goldman might have less to fear over the next year.

Meanwhile …

The soap opera of KPMG in Dubai has come to an end, as Nader Haffar told partners there that he would step down and not contest the election for the next head of the practice.  His departing statement said that “speculation about various issues” was harming the business. (FT)

Probir Rao, head of investment banking and capital markets for India and Southeast Asia at Jefferies, is leaving the firm, although Jefferies is still hiring in the region (most recently taking David Biller from Citi (Business Standard)

A very deep dive into CVC, the extremely lucrative (also extremely male) private equity firm which pays out massive “carried interest” to “deal captains”.  As the company gets ready to list on the Amsterdam Stock Exchange (at an … interesting point in the cycle to be cashing in), one insider warns “I haven’t met anyone who’s ever said, I’m so glad I’m public”. (FT)

The Frieze Fair, sponsored by Deutsche, is always a good opportunity to take the temperature of European UHNWI.  This year the visitor numbers were “unprecedented” on the first day, but art sales have been “solid rather than spectacular”. (Bloomberg)

If you’re looking for a sideways career move – or indeed, an insanely profitable side-hustle – it’s possible to make $200,000 a year ghostwriting tweets for venture capitalists.  One startup CEO makes more money out of his VCs this way than by getting their investments. (Business Insider

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