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Deutsche Bank is hiring in M&A in 2017, but the bank's own assessment of opportunities this year suggests it might want to strengthen its debt capital markets business, its rates desks, or equity capital markets team instead.

Deutsche's European banking analysts have just released their latest "pulse" on the comparative strength of investment banks' different business lines. Based on trading volumes, primary revenues and spreads, the pulse provides a snapshot of banks’ businesses compared to the preceding quarter and the same quarter one year earlier. As the charts below show, DCM and particularly high yield DCM is booming on both measures. So too are equity capital markets and European rates derivatives. Trading in U.S. investment grade (IG) corporate bonds isn't doing badly either.

Deutsche predicts rates desks will do better as the year progresses and the U.S. Federal Reserve implements more rate hikes. As a macro-focused investment bank with a strong U.S. presence, Deutsche says Barclays should be the big beneficiary, although BNP Paribas' rates-focused business stands to benefit too.

By comparison, Deutsche's analysis echoes Morgan Stanley's and Oliver Wyman's when it comes to cash equities. 2017 is not turning out well for equities professionals, whether in the U.S. Europe or Asia. And for all the talk about Donald Trump encouraging M&A activity, the M&A pulse was down on the fourth quarter. Beware.

Business performance year-on-year

Deutsche pulse April

Business performance quarter-on-quarter

Deutsche pulse April 2


Photo credit: Deutsche Bank | London Wall by Justin Pickard is licensed under CC BY 2.0.

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