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Morning Coffee: Dark mutterings about the Deutsche Bank bonus pool. Pre-bonus knifings at Credit Suisse

A phantasm has coalesced from the murky chatter surrounding Deutsche Bank’s 2016 cash bonuses: seems there might not be any after all.

You will recall that Deutsche Bankers went from all-but dismissing any hope of getting a cash bonus back in September when the prospect of a giant $14bn DOJ fine first broke water, to re-stoking their cash hopes in late December when the actual DOJ fine weighted in at a mere $7bn.

Now it seems there may be a catch. Dealbreaker has heard tell of a potentially spurious but supposedly “very strong” rumour to the effect that the DOJ halved the fine on the understanding that Deutsche would scrap its 2016 cash bonus pool. The same rumour says some Deutsche MDs will get “retention packages”, but they’ll have to wait five years for these to vest.

How likely is this? Deutsche is declining to comment, but insiders in the know say it's not likely at all and that no such conditions were appended to the DOJ settlement. Deutsche’s bankers will only really know when the bank announces its bonuses and reports its fourth quarter results around February 2nd. Deutsche’s third quarter results were preceded by allegations that it was planning to pay this year’s bonuses from toxic debt, a la Credit Suisse. However, in the call accompanying those results, Deutsche CFO Marcus Schenck told investors that the structure of bonuses had yet to be determined - but that they would probably err on the side of stock.

If Deutsche does cut its bonuses, it won’t be the first time. Last year, the bonus pool in the investment bank was down 20% and there were complaints that it was the “worst year ever.” Even if cash bonuses are slashed again, though, Deutsche’s highest performers won’t be that badly off. Average salaries at the investment bank were hiked by 30% or more in 2015, and again last year.

Separately, the knives are out at Credit Suisse. We’re only weeks away from the Swiss bank’s own bonus announcement, and Stephen Dainton, the bank’s head of equity trading in the U.K. and Europe, the Middle East and Africa and co-head of global markets is leaving. It’s possible that Dainton is going of his own accord, but if so it would surely make more sense to leave after bonuses have been paid? Dainton’s exit follows a poor third quarter for equities trading at Credit Suisse and the recruitment of Michael Stewart from UBS as head of equities in December.


A financial institutions syndicate banker has left Deutsche before bonuses. (Reuters) 

A Goldman Sachs partner who led investments in the new renewable energy sector has decided to retire after 22 years. (PEHub) 

A Goldman Sachs partner with a preternaturally smooth forehead has resigned to join Trump team. (Politico)    

Goldman Sachs thinking of creating contemplation pods “for personal reflection” in its London office, supplementary to toilet cubicles. (Financial News)

Goldman Sachs has got some new heads of technology banking, in San Francisco. (Business Insider)

Maybe banks should’ve stayed in Moscow after all? (Intellinews)

British government says banks might have to pay a £1k premium to employ skilled non-British EU workers in London. (Bloomberg) 

British government says banks won't have to pay a £1k premium to employ skilled non-British EU workers in London after all. (Sky)

Don’t believe the Dublin hype. (Bloomberg) 

When quants bitch: “They are using oversimplified models with bad inputs.” (Bloomberg) 

Soon everyone will want to ride a Citi bike. (Gothamist)

Soon everyone will want to wear this black leather-effect mouth-earphone device in order to talk to clients in private. (Cityam) 

A Barclays director who wanted to leave banking for something a little less stressful and tried to woo a plumber friend with stock tips in the hoping of launching new plumbing/building career, has been jailed. (Bloomberg)  


AUTHORSarah Butcher Global Editor

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