Deutsche Bank cut 40 jobs a day as its investment bank lost market share

So much for Deutsche Bank's 70 layoffs a day in May and June 2018: the German bank's preliminary Q2 results, released unexpectedly today, reveal that only around 40 jobs each working day (1,700 in total) were eliminated in the two months after CEO Christian Sewing took over in April. Maybe Sewing decided to go easy on his front office bankers people after all? Even so, Deutsche's corporate and investment bank (CIB) kept on losing market share.

As a quick recap, Sewing said in April that he intended to cut 7,000 jobs across the bank. Around 5,000 of these (although Sewing didn't exactly say so) were expected to come from the CIB. At the end of May, Sewing said he planned to make all the front office CIB job cuts in June - implying around 2,200 front office job cuts in a month based on the fact that 45% of Deutsche's CIB staff are in the front office (and presuming that the cuts were made in proportion to this).

The fact that just 1,700 jobs have been eliminated therefore implies that Deutsche's front office bankers got off very lightly. Yes, emerging markets bankers, oil and gas bankers, equity structurers, healthcare bankers, prime brokerage personnel, and U.S. rates people have gone (among others), but it could have been much worse. Even so, Sewing's strategy is showing signs of shakiness: as bankers are falling away, so - seemingly - is Deutsche Bank's market share.

So far, only J.P. Morgan and Citi have divulged their results for the second quarter of 2018. Based on today's limited revelations from Deutsche Bank (DB only gave overall revenue figures for all trading and for the whole of its investment banking division), Deutsche's traders and its investment bankers lost share to their counterparts in the second quarter of 2018 - only the woeful performance of Citi's investment bankers was worse. More worryingly - and as the second chart below shows - Deutsche's traders and bankers also lost significant share to their two U.S. rivals in the first half of this year as a whole. And while Deutsche is losing, J.P. Morgan seems to be growing.

Sewing may not care about the shriveling share of Deutsche's investment bank. - He is after all, a retail banker, who is widely expected to pivot to what he knows. However, Sewing has also said that he wants the investment bank to remain core to Deutsche's DNA. We'll only really know how Deutsche compares once other banks report over the next few weeks. For the moment, though, Sewing seems to be proving the adage that you can't shrink to glory - and that if you try to, U.S. investment banks will take advantage of your diminution.

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