Lunchtime Links: Not so sensational now at DB

5 February 2009

2 minute read

Lunchtime Links: Not so sensational now at DB

It seems only a few days ago that Deutsche Bank got everyone excited by saying that the first few weeks of the year had been positively "sensational". Unfortunately, its fourth quarter results, released today have put paid to the notion that all is fine at Deutsche World: DB announced its biggest annual net loss since the 2nd world war, of €3.9bn ($5bn). Needless to say, the investment bank was largely to blame, with big losses in credit and equity derivatives trading. Headcount in the corporate banking and securities division fell by a (mere) 696 people in the final quarter. Average annual comp per head across the corporate and investment bank fell 64% to €257k. More promisingly, Ackermann said further cuts in global markets are unlikely unless things worsen, and that that revenues rose significantly in January.

Deutsche said to be cutting people marginally before bonuses are paid. (Dealbreaker)

The sudden popularity of Credit Suisse, Deutsche and boutiques - anywhere without Tarp money. (Wall Street Journal)

Great news: large bonuses planned at RBS (The Times)

"If you're 50 per cent down, you've done OK". (Financial Times)

Goldman Sachs wants to pay big bonuses pay back Tarp money. (Financial Times)

"If the incentive for reaching the top of the banking tree is a salary that is well below what a junior hedge fund trader can aspire to, how will Goldman Sachs and Morgan Stanley groom future leaders?" (Financial Times)

It is time to understand your boss now lives in the White House, and he is relying on the votes of your doorman and your secretary. (Financial Times)

Profits fall less than expected at Lazard. (Bloomberg)

'Encouraging' January at Bank of America. (Bloomberg)

100 jobs going at Bloomberg (The Times)

New boutique Audi Quattro Partners makes first hire (Financial News)

AUTHOReFinancialCareers UK

Insider Comment

Ze
Zerbeline
6 February 2009
Manu - the previous benefit were distributed in bonus, dividends and investments, they were not waiting there just to cover a big loss. And some areas have managed to lose in one year more than they ever made in the previous 10 years! so I think the what happen next question makes sense...
Regarding performance: if there is no business left to do, you have to reduce the team and criteria such as seniority or specialized function do matter and this only one example amongst many. And don't forget all the political aspects too...
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Ma
Manu
6 February 2009
No Zeberline, you don't need to "make up" the $5bn loss before continuing - note how much surplus profit they saved over the last decade so its not like their balance sheet is hugely impaired by this one loss. They explicitly said yesterday they've written off 2008, should be no more losses/writedowns whatsoever, paid bonuses in stock, deferred cash etc so shouldn't be a problem, and the only way is up from here - in fact some writedowns may become write-UPS across banks as liquidity eventually comes back!
Also sorry but I agree with Razel - much greater likelihood of underperformers being made redundant than outperformers, how can anyone disagree with that..??
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Ze
Zerbeline
6 February 2009
That is below market average as per results. The question is what will happen next: annual net loss of $5bn so even if start (and rest...) of 2009 is ok... don't you need to make up for your loss before getting paid again?
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ma
max1
5 February 2009
DB insider : OK I accept this, fair enough, was thinking more of a VP level etc. good stuff then from all my junior friends in DB, too bad for the senior ones..but that;s life. Had a meeting yesterday and people seem to be cool about it..and frankly for the senior people , most of them they deserve it...thanks and will be passing the good news to the rookies, they are buying me drinks next week.
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DB
DB insider
5 February 2009
max1, no really I know. 65% down across the board doesn't mean 70% down for analysts! DB ALWAYS treat analysts/associates OK at the expense of MDs. The best / 2nd best payer in London for analysts/associate bonuses. Had a meeting today, -20% to +5% YoY is very accurate. (ie on what they got last year, not what they would have got this year).
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