As the whispering about the potential merger between Deutsche Bank and Commerzbank intensifies, rumbles are coming out of Deutsche Bank's fixed income division. Yesterday, a townhall for Deutsche's foreign exchange business took place. Attendees say the vibe was good and that in Deutsche's FICC business a potential merger with Commerzbank would seen as broadly equivalent to an awkward man-hug with a slightly provincial friend.
Ioannis (Yanni/John) Pipilis, Deutsche's global head of fixed income, is understood to have informed attendees that while he personally had no insider knowledge of the potential merger beyond what's been reported in the press, he didn't think it would be much of a bad thing. "If it happens, it would be a good idea," Pipilis is understood to have told his team.
It's not hard to see why Pipilis might feel that way. In any merger with Commerzbank, Deutsche's fixed income trading division - which ranks in the top four to six globally - would more than own Commerzbank's, which doesn't rank at all. Pipilis' own area of particular focus - credit trading - ranks first globally. Commerzbank's credit traders would be left in the dust.
Pipilis' comments come after a report from German union Verdi suggested 10,000 jobs could go in the fusion of Germany's two banking titans. Verdi didn't say where the jobs would disappear, but suggested technology could be a particular problem. Deutsche's IT division was last year accused of being "dysfunctional" by the outgoing COO, and Verdi points out that the creation of a common new IT infrastructure could overwhelm the merged banks.
This doesn't seem to have been top of Pipilis' mind. At the same townhall, insiders say head of FX Jonathan Tinker stood up and said all banks have to evolve to survive in the FX business. Deutsche has been successfully doing this, said Tinker - but it needs to continue.
Deutsche Bank declined to comment.
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