Deutsche Bank has a new-old MD managing the rates books in its CRU
As Deutsche Bank focuses on running down the trading books in its capital release unit (CRU), long-serving existing staff are being moved into the business.
One of those to get the call is Lionel Arbey, a Deutsche Bank veteran of nearly 16 years who is now a managing director on the European and U.S. rates books in the CRU. Arbey was previously head of fixed income and currency structuring for Deutsche in Asia Pacific, based out of Singapore. It's not clear whether he's now based in London.
As we reported last week, the CRU and its ability to wind down existing risk weighted assets is seen as crucial to Deutsche's future profitability. The CRU oversees €70bn in risk weighted assets, mostly from Deutsche's equities business. However, around €15bn come from fixed income, including rates.
Deutsche Bank's fixed income sales and trading business underperformed in the third quarter, with revenues declining 13% year-on-year. The bank blamed this on emerging market debt, restructuring in rates, a €37m loss on a specific investment, and leadership changes early in the quarter. Rates is now headed by Cam Gilbert, who returned from Mizuho to run the business in September.
Deutsche's CRU made a loss of €1bn in the third quarter and €2.4bn in the first nine months of this year. If Deutsche's investment bank is to become profitable again, JPMorgan says the CRU will at least need to stop booking negative revenues.
As the CRU winds down its books, it is also winding down its staff. 1,203 people disappeared from the unit (or its equivalent units in the investment bank) in the year to September. Deutsche paid an average of around €80k to each of them in severance.
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