Deutsche Bank plans to add dozens of commodities traders and staff this year, while eliminating as many as 300 jobs in global equity and debt markets.
The moves reflect an industry-wide trend to shift resources into activities that can benefit from secular bull markets, while cutting back in traditional asset classes that felt the full force of last year's credit meltdown. Deutsche also announced nine new hires this month in private wealth management - another business line where profits and headcounts are growing across the industry.
In commodities, the Frankfurt-based bank is set to boost headcount by 15 to 25 percent within its unit, which currently employs between 150 and 250 people, says Bloomberg News. With commodity trading revenue of about 200 million euros ($292 million) in 2006, Deutsche has a relatively small presence compared with the sector's leaders, Goldman Sachs and Morgan Stanley.
David Silbert, Deutsche's London-based global head of commodities, told Bloomberg new slots will be added in Asia for precious metals, in London for steel, in New York for agriculture and globally for oil. About half of the bank's commodities team is now based in London.
Silbert said the expansion will take Deutsche into agricultural contracts for the first time, along with additional crude oils such as Urals, Russia's benchmark export blend, and Dubai crude. The team now trades contracts for oil, U.S. natural gas and power, European power, carbon emissions and metals.
Hiring Decision Makers
Along with Silbert, hiring managers for the new roles might include:
- John Redpath, global head of oil products and agriculture, who joined Deutsche last year from Citigroup,
- Ray Key, worldwide head of metals, hired from Morgan Stanley last year, and
- Simon Grenfell, head of commodities in Asia, hired last year from Macquarie Bank Ltd.
Silbert himself joined Deutsche last March, after heading Merrill Lynch's commodities business in Europe.
Cuts in Equity, Debt Markets
Meanwhile, Financial News reports Deutsche has begun eliminating 250 to 300 jobs in its global markets division. The reductions involve equity sales and trading, debt capital markets and derivatives, and are said to include several senior managers in the bank's New York-based credit business. "The job losses will affect staff across the bank's global offices, with employees in New York, London, continental Europe and Asia all facing the chop," the paper says.
The pullback follows Deutsche's announcement last October that it cut the bonus pool and would reduce expenses by 40 percent, after sub-prime-related write-downs and trading losses led to a 93 percent decline in third-quarter profit.