Poor Peter Selman at Deutsche Bank
Poor Peter Selman. Deutsche Bank's head of equities, who only joined the German bank in December 2017, is said to be leaving again as Deutsche prepares to make significant cuts to his unit. DB insiders tell us Selman hasn't been seen at work for at least a week.
Neither Deutsche nor Selman immediately responded to a request to comment on the situation. The Wall Street Journal says an alternative role for Selman had been discussed in Deutsche's proposed bad bank, but that he plans to leave all the same.
The sorry end to Selman's DB career carries warnings for other bankers offered big jobs at banks in need of heavy restructuring. After graduating from Cambridge University in 1994, Selman devoted most of his career to Goldman Sachs, where he was co-head of equities trading. He 'retired' from Goldman in September 2016 and spent the next 15 months sitting out of the market - until he was recruited by former Deutsche CEO John Cryan to take over Deutsche's ailing equities business.
Cryan, however, left Deutsche long before Selman even arrived and the new equities boss was therefore on the back foot from the start. Deutsche's equities business was already in decline and although Selman said he wanted to revive it, money for doing so seemed to be limited. - Selman said at the start of 2018 that he planned to focus on hiring graduates at DB, presumably as a way of saving money.
Instead of presiding over growth in Deutsche's equities business, Selman ushered in a further revenue contraction of 12% last year. In the circumstances, this probably wasn't too bad. - Deutsche's new CEO Christian Sewing decided in May 2018 that he wanted to cut around 25% of equities sales and trading staff, leaving Selman scrambling to hold the business together. As Deutsche prepared its bonus round for 2018, there were rumours that Selman personally intervened to persuade DB to boost the equities bonus pool. Even so, Deutsche's U.S. equities staff in particular complained of big bonus cuts, and Selman has spent much of this year watching his best staff walk out the door.
In a pep talk to his U.S. staff in March, Selman told them not to dwell on colleagues' exits, but to focus on the opportunities. It wasn't true that the U.S. equities business was losing money hand-over-foot, said Selman (The WSJ had recently reported that the unit made a $750m loss in 2018). DB was hiring, he added and there was nothing wrong with the bank's equities business.
It now appears that this was wishful thinking. Deutsche is expected to announce further big cuts to its equities business when it announces its second quarter results this July. In the meantime, insiders at the bank say there are rumours that whole businesses are being shopped to rivals and that everyone wants to leave but no one is hiring. "It's going to be cheaper to hire us from the beach," says one.
With Selman seemingly gone, the new man to know at Deutsche Bank equities seems to be James Davies, a former credit structurer who has become a fixer for Sewing. Davies moved to New York in November 2018. Bloomberg says he will have a larger role in future.
There's some question now over what happens to his big hires like Greg Sutton, who only joined from Citi to lead U.S. cash execution in March 2019. There's also some question over the future for the 35 interns currently working on Deutsche's U.S. equities trading floor and the graduate hires about to arrive, although insiders said the graduate program is continuing as before.
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