Bad things are fast approaching for fixed income professionals at Deutsche Bank. Several weeks ago, Handelsblatt reported that Deutsche will be dumping 500 investment bankers, almost all of them in fixed income, almost all of them in London. Deutsche isn't commenting on the allegations, but we understand that this is the week in which the big Deutsche dump will commence.
"It's about to begin," says the head of one fixed income search firm, speaking on condition of anonymity. "Starting this week, Deutsche is going to be letting go of 300-400 people at managing director and director level. A lot of people are going to be coming onto the market."
Some senior Deutsche fixed income bankers appear to be leaving the German bank preemptively. The Financial Conduct Authority Register shows that Garry Naughton, Deutsche's (ex-)European head of government bond trading, left the bank on March 17th. Rumour suggests that Naughton is off to Goldman Sachs, which lost Nick Bhuta, its own head of government bond trading to Tudor Capital in February. Naughton did not return a call requesting confirmation of his intentions.
Where can the Deutsche fixed income professionals go?
What can you do if you're one of the hundreds of fixed income professionals let go from Deutsche in the weeks to come?
Headhunters say the options look sadly limited. "Very senior people will struggle to find the same level of opportunity in this environment," says David Reynolds at search firm Scott Reynolds. "There are not many places for them to go." Alex Tracey at Kinvara Search agrees: "There's very little hiring going on. For the time being, a lot of senior people are simply getting out of the industry."
Top Deutsche people may not be entirely devoid of options, however. Bank of America has hired Michele Foresti, Deutsche's former European head of credit and rates trading. Foresti is on gardening leave, but is due to join BofA in June. At that point, he will (hopefully) hire in a few senior people from Deutsche. And yet, headhunters warn that this may be wishful thinking. "BofA is now a Goldman cartel," says one, "Foresti will need to bed himself in before he brings across a load of Deutsche colleagues, otherwise he'll be out of there."
Other options for traders dumped by Deutsche include BNP Paribas, which continues to recruit selectively for its fixed income business. NBAD (the National Bank of Abu Dhabi) is also said to be building a fixed income business in London. Australian banks like Macquarie, Westpac and ANZ will reputedly look at people "selectively," as will Japanese banks like Mizuho or Mitsubishi. All will be seen as a step down for people leaving Deutsche. "There are no easy seats available in other places," one fixed income headhunter warns.
BNP Paribas rescues senior fixed income trader from Morgan Stanley
German banks look like the worst payers
Heinous pay for Deutsche MDs, and other compensation facts