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Morning Coffee: Immensely good news for investment bankers at Deutsche. IBD endurance brings rewards

Investment banking employees at Deutsche Bank can be forgiven for feeling disorientated. Only last week, the Financial Times quoted an unnamed senior insider who said Deutsche's investment bank would have an "axe" taken to it when Deutsche unveils its new five year plan on April 29th. Now, it seems they've been granted a reprieve.

The Wall Street Journal offers two reasons to feel hopeful. Firstly, it points out that Deutsche co-CEO Jürgen Fitschen has been making soothing noises of late. - Fitschen reportedly said last week that Deutsche's strategic review, 'won’t necessarily result in a dramatic overhaul and the bank remains committed to being a global lender with a broad range of services [our emphasis].' This seems to suggest that Deutsche won't be unveiling a big change in direction, that it does still want to operate an investment bank, and that it intends to do so globally. Secondly, the WSJ reports that Laurence Fink, Blackrock chief executive, is all for the German bank retaining its global investment banking operations and maintaining a presence in fixed income sales and trading. This is significant because Blackrock is Deutsche's biggest shareholder. Fink doesn't seem alone in his opinion: "“The commitment to investment banking is in principle the right strategy because it has the highest returns in good times,” another Deutsche shareholder told the Journal. So that's OK then.

Separately, if you can survive the harsh early years of a career in the investment banking division (IBD) of a major firm, you could be set up for life. We say this because we've observed a common trend in M&A promotions at most major banks: they almost always involve senior staff with incredibly long tenure.  The latest manifestation is at Credit Suisse, where the previous global head of M&A, who joined the bank in 1982 is reportedly stepping aside to be replaced by two men - Robin Rankin and Greg Weinberger - who've worked for the bank for 22 and 19 years respectively. Similarly long tenure was in evidence when global M&A head roles were filled recently at Goldman Sachs and J.P. Morgan.  The early years in IBD are harsh, but if you can survive the spreadsheets and get in front of clients, you can make yourself indispensable.


Man Group just increased compensation for its chief executive by 49%. (WSJ) 

Looks like BlueCrest might hire some more equities managers soon. (Reuters)

Alex Figueroa, an MBA recruiter at Goldman, says that the bank’s recruitment style is to find people who are smart and then teach them what they need to know on the job.“They’ll use their own initiative and the firm’s resources to launch their career. We’re not cookie-cutter in our approach.” (Business Because) 

People in London would rather work in engineering and automotive aerospace than investment banking. (CityAm) 

COO of UBS Wealth Management says the bank is looking at the rising popularity of robo-advisers, which provide online wealth management tools at low cost: “It’s a very interesting space and we are definitely considering using elements of what they employ in our own offering.” (Financial Times) 

UBS is paying its deferred bonuses in contingent capital bonds. (SwissInfo)

UBS has introduced role-based pay for code staff too. The only European bank not to have it now is Deutsche. (WSJ) 

J.P. Morgan is selling the site that was going to house its new European HQ in Canary Wharf. (SundayTimes) 

Complaining about investment banks hiring rich children in order to win deals from their rich families is like complaining why beautiful people are more likely to receive better service than ugly ones. (South China Morning Post) 

Well-spoken City trader leaves his job, goes to fight against Isis in Syria. (BBC) 

A tax auditor died at his desk and wasn't found for two days. (Forbes) 

How to escape LinkedIn. (BoingBoing) 


AUTHORSarah Butcher Global Editor

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