Disillusionment at Deutsche Bank after yesterday's IBD town hall
With the bank's share price at record lows and an endless litany of bad press, Deutsche Bank's senior management are trying to shore-up morale. Last week, CEO Christian Sewing declared that everyone was "sick and tired of bad news" and emphasized Deutsche's strong capital ratios and ample liquidity reserves. Yesterday, Alasdair Warren, head of the investment bank in EMEA gave his monthly town hall along with overall head of Deutsche's corporate and investment bank, Garth Ritchie. If Sewing healed wounds, Warren and Ritchie - but especially Ritchie - seem to have opened them again.
Deutsche Bank isn't commenting on the investment banking division (IBD) gathering, but attendees have complained that they came away feeling more put out than when they went in.
At issue seems to be a remark of Ritchie's to the effect that it doesn't matter if Deutsche cuts too many staff in its quest to cut costs because it can always hire people back again in future. "He basically told everyone in the room and on the conference call that each and every one of us is a free option as far as he is concerned," complained one senior Deutsche corporate financier. "It’s pretty funny actually: we are told by managers earning millions per year that all of us who earn literally a fraction of their pay are free options. It makes total sense but is thoroughly demotivating," he added.
Alasdair Warren's own contribution doesn't seem to done much to palliate Ritchie's message. "Warren just told us to keep working hard," said the banker. "It was the same old hackneyed phrases."
Deutsche's investment bankers aren't immune to the 7,000 layoffs in Sewing's plan, of which around 2,200 are expected to affect front office jobs in the next month. Sewing has made it clear that he intends to cut corporate financiers in teams not related to European clients. Deutsche already closed its Houston office, shut down the oil and gas team, laid off multiple people in healthcare and combined junior and mid-ranking staff up to VP level in larger teams (North and South Europe have been unified in DB's world, along with natural resources, infrastructure and utilities, and then healthcare, consumer and retail.)
In the circumstances, Warren and Ritchie's presentation might have been expected to rally the troops. Instead, it seems to have done the opposite. "It reminds me of a sign of a skull and crossed bones I saw in an ice cream shop once; under it was written: 'The beatings will continue until moral improves,'" said the disgruntled senior banker. "There is no incentive to work here and management knows it."
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