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If Deutsche Bank cuts rates staff in Europe, no one is safe

The fear

Next time Deutsche Bank takes out costs, rates staff might again be the target: Bloomberg says the German bank is contemplating cutting another 10% of people in its rates business globally. 

Deutsche is neither confirming nor denying the claim. Charlie Olivier, a spokesman for the bank, says it's "committed to a robust and broad based rates business" and is "investing in areas" that will grow the client franchise. This suggests selective hiring, but also wouldn't seem to preclude trimming around the edges before the year end.

Deutsche's European rates desk has already been through a period of change. Deutsche Bank CEO Christian Sewing said the bank planned to 'resize' its rates business in his July strategy presentation. Accordingly, David Cross and Igino Napoli, Deutsche's head of linear rates trading in Europe and head of the sovereign, supranational and agency (SSA) trading desk, left the bank in early September. And as we reported last month, Mark Deniston, the former head of EMEA rates trading quietly also left the bank after Cam Gilbert, Deutsche's former head of rates trading, returned from Mizuho to lead the team.

Deutsche's rates staff, who headhunters estimate number around 85 in London (sales, trading and research), can  be forgiven for thinking big changes have been made already. Any further cuts in London might simply be case of Gilbert ejecting existing staff in order to hire-in some new ones he likes better in 2020. 

If Deutsche cuts again in rates though, it might cut again anywhere. The bank's own analysts said last week that rates desks across the market had a "particularly strong" third quarter, with European rates businesses especially experiencing strong growth. If the comparatively fast-growing European rates business is trimmed, surely anywhere else at DB is susceptible to pruning too. 

While Deutsche apparently eyes more cuts in rates, it has been hiring elsewhere. Ade Ademakinwa rejoined from Nomura as head of the European FIG syndicate desk in July, for example.

One headhunter says Deutsche Bank would be foolish to cut another 10% of rates staff in europe: "They're very thin and don't have anyone left to cut," he says. "Although it always makes sense to cut people who aren't performing relative to the expectation for their seniority."

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AUTHORSarah Butcher Global Editor

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